AT  PACKER 


HEARINGS 

BEFORE  THE 

COMMITTEE  ON  AGRICULTURE 

HOUSE  OF  REPRESENTATIVES 

SIXTY-SEVENTH  CONGRESS 
FIRST  SESSION 

ON 

H.  R.  14,  by  Mr.  Haugen 

H.  R.  232,  by  Mr.  Anderson 

H.  R.  5034,  by  Mr.  McLaughlin  (Nebr.) 

H.  R.  5692,  by  Mr.  Williams 

MAY,  1921 

Series  D 

* 


46985 


WASHINGTON 

GOVERNMENT  PRINTING  OFFICE 
1921 


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MEAT  PACKER 


HEARINGS 

BEFORE  THE 

COMMITTEE  ON  AGRICULTURE 


HOUSE  OF  REPRESENTATIVES 

SIXTY-SEVENTH  CONGRESS 
FIRST  SESSION 

ON 

H.  R.  14,  by  Mr.  Haugen 
H.  R.  232,  by  Mr.  Anderson 
H.  R.  5034,  by  Mr.  McLaughlin  (Nebr.) 
H.  R.  5692,  by  Mr.  Williams 


MAY,  1921 


Series  D 


46985 


WASHINGTON 

GOVERNMENT  PRINTING  OFFICE 
1921 


COMMITTEE  ON  AGRICULTURE. 


House  of  Representatives. 


GILBERT  N. 

JAMES  C.  McLAUGHLIN,  Michigan. 
CHARLES  B.  WARD,  New  York. 

FRED  S.  PURNELL,  Indiana. 

EDWARD  VOIGT,  Wisconsin. 

MELVIN  O.  McLAUGHLIN,  Nebraska. 
CARL  W.  RIDDICK,  Montana. 

J.  N.  TINCHER,  Kansas. 

THOMAS  S.  WILLIAMS,  Illinois. 

JAMES  H.  SINCLAIR,  North  Dakota. 
EDW.  D.  HAYS,  Missouri. 

CHARLES  J.  THOMPSON,  Ohio. 

FRED  B.  GERNERD,  Pennsylvania. 
FRANK  CLAGUE,  Minnesota. 

JOHN  D.  CLARKE,  New  York. 

J.  KUHIO  KALANIANAOLE,  Hawaii. 

L.  G. 


;AUGEN,  Iowa,  Chairman. 

HENCE  JACOWAY,  Arkansas. 

JOHN  W.  RAINEY,  Illinois. 

JAMES  B.  ASWELL,  Louisiana. 
DAVID  H.  KINCHELOE,  Kentucky. 
MARVIN  JONES,  Texas. 

PETER  G.  TEN  EYCK,  New  York. 


en,  Clerk. 


2 


33  S A 
\)\V\'i\ZJLY A 


CONTENTS. 


Statement  of — Pag©. 

Hon.  Gilbert  N.  Haugen 6 

Sidney  Anderson 11 

R.  J.  Wells 31 

G.  H.  Sullivan 48 

Mrs.  E.  P.  Costigan 53 

Mrs.  Florence  Kelley 54 

T.  C.  Atkeson 68 

B.  C.  Marsh 80,465 

W.  M.  Clark 99 

Vernon  Campbell 100 

Arthur  Free 114 

S.  T.  Nash 123 

Howard  R.  Smith 175 

Thomas  W.  Taliaferro 191 

Robert  J.  Beacham 216 

Gustave  Bischoff 219 

Fred  Krey 229 

L.  E.  Dennig 224 

Hon.  Henry  C.  Wallace,  Secretary  of  Agriculture 229 

Michael  Ryan 249 

Everett  C.  Brown 278 

J.  S.  Boyd 306 

J.  C.  Hormel 310,  3 15 

N.  P.  Rogers 350 

Oscar  G.  Mayer 3S1 

Thomas  E.  Wilson 396 

Thomas  Creigh 429 

Gray  Silver 480 

Walter  Y.  Durand 487 


3 


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MEAT  PACKER. 


Committee  ox  Agriculture, 

House  of  Representatives, 

Monday , May  2 , 1921. 

The  committee  met  at  10  o’clock  a.  m.,  Hon.  Gilbert  N.  Haugen 
(chairman)  presiding. 

There  were  present:  Mr.  Haugen,  Mr.  Purnell,  Mr.  Voigt,  Mr. 
McLaughlin,  of  Nebraska,  Mr.  Riddick,  Mr.  Tincher,  Mr.  Williams, 
Mr.  Sinclair,  Mr.  Hays,  Mr.  Thompson,  Mr.  Clague,  Mr.  Aswell,  Mr. 
Kincheloe,  Mr.  Jones,  and  Mr.  Ten  Eyck. 

The  Chairman.  The  committee  has  been  called  together  this 
morning  to  give  consideration  to  packer  legislation. 

What  arrangement  can  we  make  as  to  division  of  time  and  who 
shall  control  the  time?  Who  will  take  charge  of  the  time  in  oppo- 
sition to  the  legislation  ? 

Mr.  Lightfoot.  We  are  perfectly  willing  to  leave  that,  Mr.  Chair- 
man, to  the  selection  of  the  committee,  or  if  you  desire,  some  of  the 
counsel  for  the  packers  are  here  and  they  might  take  charge  of  that, 
if  there  is  no  one  on  the  committee  who  desires  to  do  so. 

The  Chairman.  Can  an  arrangement  be  made  between  the  packers, 
traders,  commission  men,  and  others  affected  ? 

Mr.  Lightfoot.  I think  so.  We  can  divide  the  time  according 
to  the  witnesses  who  are  here. 

The  Chairman.  Then  whom  do  you  suggest  ? 

Mr.  Veeder.  Gen.  Lightfoot  and  I between  us  will  see  to  it  that 
one  of  us  appears  here  all  along  and  see  that  the  witnesses  for  the 
opposition  are  allotted  time,  if  that  is  what  is  desired. 

The  Chairman.  If  that  is  agreeable  to  all  opposed  to  the  bill, 
I am  sure  it  will  be  agreeable  to  the  committee. 

Mr.  Sullivan.  Mr.  Chairman,  there  is  an  independent  witness 
here  who  desires  to  be  introduced  into  the  discussion,  from  the 
State  of  Minnesota,  and  will  take  only  a very  few  moments  of  your 
time,  the  point  being  that  Minnesota  already  has  a stock  yards 
regulation  of  its  own,  and  desires  to  introduce  the  subject  of  amend- 
ing the  bill  so  as  to  exenrpt  Minnesota  from  the  operations  of  the 

bill. 

The  Chairman.  Would  the  arrangement  suggested  be  satis- 
factory to  you  ? 

Mr.  Sullivan.  Mr.  Chairman,  there  is  only  one  feature  involved, 
and  that  is  it  will  only  take  a few  moments  and  his  engagements 
are  such  that  he  would  like  to  be  heard  early,  if  that  is  compat- 
ible with  the  division  of  the  time  on  the  part  of  those  in  opposition. 

Mr.  Lightfoot.  That  is  agreeable  to  us. 

The  Chairman.  The  thought  is  to  give  everybody  an  oppor- 
tunity to  be  heard  in  the  time  alloted. 


6 


MEAT  PACKER. 


Mr.  Tincher.  Mr.  Chairman,  I presume  every  one  understands 
that  the  proponents  of  the  different  measures  are  to  have  to-day 
and  to-morrow,  and  Friday  afternoon,  and  the  opponents  are  to 
have  Wednesday  and  Thursday,  and  the  morning  of  Friday. 

The  Chairman.  Yes.  The  secretary  of  the  National  Live  Stock 
Exchange  is  also  here.  You  will  confer  with  him. . If  there  is  any 

disagreement  among  you 

Mr.  Veeder.  We  will  refer  it  to  you  to  arbitrate. 

The  Chairman.  The  committee  will  arbitrate  for  you. 

Mr.  Lightfoot.  We  will  try  to  accommodate  anybody,  so  far  as 
our  time  is  concerned,  who  wants  to  appear  in  opposition  to  the  bill, 
whether  they  are  packers  or  commission  men  or  whatever  they  may  be. 

Mr.  Tincher.  And  the  chairman  will  control  the  time  of  the 
proponents  of  the  legislation. 

Mr.  Kincheloe.  Yes;  and  I think  it  is  very  necessary  for  these 

fentlemen  to  control  the  time  of  those  who  are  in  opposition  to  the 
ill  so  that  the  time  is  not  only  allotted  but  they  can  pick  the  per- 
sonnel of  those  whom  they  want  to  appear  before  the  committee. 

The  Chairman.  Of  course.  If  there  is  any  member  of  the  com- 
mittee who  desires  to  control  the  time  in  opposition  to  the  bill,  we 
will  be  glad  to  have  him  do  so.  I understand  no  member  wants 
to  control  the  time  against  or  assume  the  responsibility. 

Mr.  Kincheloe.  I think  the  chairman  ought  to  control  the  time 
of  those  in  favor  of  the  bill. 

Mr.  Lightfoot.  Formerly,  Mr.  Chairman,  the  Congressmen  who 
happened  to  represent  the  district  in  which  these  large  interests  are 
located 

The  Chairman.  Mr.  Rainey  and  Mr.  Anderson  controlled  the 
time  last  Congress. 

Mr.  Lightfoot.  The  Congressman  from  that  district  is  detained 
at  home  on  account  of  very  serious  illness  in  his  family,  and  we  feel 
that  unless  there  is  some  member  of  the  committee  who  would  like 
to  control  that  time  we  will  undertake  to  do  it  for  ourselves. 

The  Chairman.  Then,  I think  we  are  all  agreed  upon  that. 

The  Chair  lays  before  the  committee  the  various  packer  bills 
introduced:  H.  R.  232,  introduced  by  Mr.  Anderson;  H.  R.  5034, 
introduced  by  Mr.  McLaughlin,  of  Nebraska;  and  H.  R.  14,  intro- 
duced by  Mr.  Haugen. 

I have  introduced  a bill,  H.  R.  14,  but  do  not  care  to  take  up  the 
time  of  the  committee  in  a lengthy  discussion  of  it  now.  We  can 
discuss  it  later.  It  is  the  bill,  practically,  which  was  reported  to  the 
House  by  the  last  committee,  and,  if  agreeable,  I will  011I3'  have  my 
statement  on  the  bill  inserted  in  the  record. 

STATEMENT  OF  HON.  GILBERT  N.  HAUGEN,  A REPRESENTA- 
TIVE IN  CONGRESS  FROM  THE  STATE  OF  IOWA,  AND  CHAIR- 
MAN HOUSE  COMMITTEE  ON  AGRICULTURE. 

The  Chairman.  Bill  H.  R.  14,  introduced  by  me,  is  practically  iden- 
tical with  the  substitute  to  the  Senate  bill  (S.  3944)  reported  by  the 
Committee  on  Agriculture  last  Congress.  It  is  the  product  of  that 
committee  and  the  result  of  weeks  and  months  of  study  and  hard  work 
by  the  Committee  on  Agriculture  of  the  Sixty-sixth  Congress.  The 
committee  gave  40  days’  hearings,  as  is  indicated  in  the  2,797  pages  of 


MEAT  PACKER. 


n 


printed  hearings.  After  the  hearings  were  concluded  the  members 
of  the  committee  met  and  decided  upon  the  policy  to  be  pursued 
and  authorized  the  appointment  of  a subcommittee  with  instruc- 
tions as  follows:  “That  a subcommittee  of  five  be  appointed,  in- 
cluding the  chairman,  to  draft  a bill  for  the  regulation  of  packers. 
That  a bill  be  drafted  without  providing  for  license  system  or  a new 
commission,  nor  the  provisions  of  section  14  of  the  Gronna  bill 
(S.  3944).”  The  subcommittee,  consisting  of  Mr.  McLaughlin  of 
Michigan,  Mr.  Anderson,  Mr.  Rubey,  Mr.  Rainey,  and  myself,  to- 
gether with  Mr.  Beaman  of  the  legislative  drafting  service  of  the 
House,  proceeded  in  an  honest  endeavor  to  draft  and  report  a bill  in 
compliance  with  the  instructions  of  the  full  committee,  which  re- 
sulted in  reporting  back  to  the  full  committee  the  bill  now  before 
you,  H.  R.  14,  with  the  exception  of  giving  the  Federal  Trade  Com- 
mission control  over  the  packers,  which  was  changed  to  the  Secretary 
of  Agriculture  by  the  full  committee,  as  is  provided  in  H.  R.  14. 

In  reading  the  bill  it  will  be  noted  that  it  has  four  titles:  Title  I 
deals  with  definitions,  Title  II  with  packers,  Title  III  with  stockyards, 
and  Title  IV  with  general  provisions. 

Section  1 provides  a short  title  for  the  act. 

Section  2 defines  “person,”  “live  stock,”  “live-stock  products,” 
“commerce,”  and  provides  that  any  transaction  in  respect  to  an 
article  shall  be  considered  to  be  in  commerce  if  such  article  is  part  of 
that  current  of  commerce  usual  in  the  live  stock  and  meat  packing 
industry,  whereby  live-stock  products,  dairy  products,  poultry 
products  or  eggs  are  sent  from  one  State  with  the  expectation  that 
they  will  end  their  transit  after  purchase,  in  another.  Articles  nor- 
mally in  such  current  of  commerce  shall  not  be  considered  out  of  such 
current  through  resort  being  had  to  any  means  or  device  intended  to 
remove  transactions  in  respect  thereto  from  the  provisions  of  this  act. 

As  to  the  constitutionality  of  the  above  regulations  I quote  from 
the  report,  which  is  as  follows : 

It  may  be  argued  that  the  attempt  to  regulate  transactions  in  stockyards  is  uncon- 
stitutional on  the  ground  that  these  transactions  take  place  after  the  live  stock  has 
ceased  to  move  in  interstate  commerce,  and  reliance  may  be  placed  upon  the  case  of 
Hopkins  v.  United  States  (171  U.  S.,  578).  in  which  it  was  held  that  the  Sherman 
Antitrust  Act  did  not  include  the  acts  of  a live-stock  exchange  composed  of  commission 
men  doing  business  at  a stockyard  and  selling  on  commission  consignments  of  cattle 
from  another  State  on  the  ground  that  this  business  was  not  interstate  commerce.  A 
careful  examination  of  the  opinion,  however,  shows  that  the  court  was  of  the  opinion 
that  the  acts  of  the  defendants  had  only  an  incidental  effect  on  interstate  commerce  in 
the  absence  of  proof  that  the  charges  for  the  services  were  exorbitant,  and  the  court 
clearly  intimated  that  Congress  would  have  authority  to  prohibit  unreasonable  charges 
and  hence  unfair  practices. 

Furthermore,  the  force  of  the  decision,  even  if  adverse,  is  greatly  lessened  by  sub- 
sequent decisions  of  the  court.  In  Field  v.  Barber  Asphalt  Co.  (194  U.  S.,  623)  it  seems 
apparent  that  the  Hopkins  case  is  construed  by  the  Supreme  Court  to  hold  that  for 
the  purposes  only  of  the  antitrust  act  commission  merchants  are  not  engaged  in  inter- 
state commerce,  the  case  being  cited  in  support  of  the  proposition  “that  the  antitrust 
act  is  not  intended  to  affect  contracts  which  have  a remote  and  indirect  bearing  on 
commerce  between  the  States.”  In  Loewe  v.  Lawlor  (208  U.  S.,  297)  the  court  says 
that  it  does  not  “pause  to  comment  on  cases  such  as  ” the  Hopkins  case,  “in  which  the 
facts  show  that  the  purpose  of  the  agreement  was  not  to  obstruct  or  restrain  interstate 
commerce.  The  object  and  intention  of  the  combination  determines  its  legality.” 

In  Title  II,  which  deals  with  packers,  section  201  defines  the  term 
“packer.” 

Section  202  defines  the  term  “secretary.” 


8 


MEAT  PACKER. 


Section  203  makes  certain  acts  unlawful  for  packers,  that  is  to — 

Engage  in  or  use  any  unfair,  unjustly  discriminatory,  or  deceptive 
practice  or  device  in  commerce; 

Make  or  give,  in  commerce,  any  undue  or  unreasonable  preference 
or  advantage  to  any  particular  person  or  locality; 

To  sell  or  otherwise  transfer  to  or  for  any  other  person,  or  to  buy, 
or  otherwise  receive  from  or  for  any  other  person,  any  articles  for  the 
purpose  or  with  the  effect  of  apportioning  the  supply  in  commerce 
between  any  such  packers; 

With  the  effect  of  manipulating  or  controlling  prices  in  commerce, 
or  of  creating  a monopoly  in  the  acquisition  of,  buying,  selling,  or 
dealing  in,  any  article  in  commerce,  or  of  restraining  commerce ; 

Engage  in  any  course  of  business  or  do  any  act  for  the  purpose  or 
with  the  effect  of  manipulating  or  controlling  prices  in  commerce,  or 
of  creating  a monopoly  in  the  acquisition  of,  buying,  selling,  or  dealing 
in,  any  article  in  commerce,  or  of  restraining  commerce; 

Conspire,  combine,  agree,  or  arrange  with  any  other  person  to 
apportion  territory  for  carrying  on  business  in  commerce,  or  to 
apportion  purchases  or  sales  of  any  article  in  commerce,  or  to  ma- 
nipulate or  control  prices  in  commerce;  or  to 

Conspire,  combine,  agree,  or  arrange  with  any  other  person  to  do, 
or  aid  or  abet  the  doing  of,  any  act  made  unlawful. 

The  acts  made  unlawful  are  among  those  alleged  to  exist  by  the 
witnesses  appearing  before  the  committee  and  referred  to  by  the 
Federal  Trade  Commission  in  its  reports. 

Section  204  provides  the  procedure,  which  is  that  whenever  the 
Secretary  has  reason  to  believe  that  a packer  has  violated  these  pro- 
visions he  shall  cause  a complaint  to  be  served  on  the  packer.  After 
a full  hearing,  if  the  Secretary  finds  that  the  law  has  been  violated, 
he  may  issue  an  order,  from  which  an  appeal  may  be  taken  to  the 
circuit  court  of  appeals.  The  court  may  modify  or  set  aside  the  order, 
but  the  Secretary’s  findings  of  fact,  if  supported  by  evidence,  are 
conclusive. 

Section  206  also  deals  with  the  procedure  and  provides  a fine  of 
$10,000  for  failure  to  comply  with  an  order  sustained  by  the  court. 

Section  207  provides  that  every  packer  shall  keep  such  accounts, 
records  and  memorandums  as  fully  and  correctly  disclose  all  trans- 
actions involved  in  his  business  including  the  true  ownership  of  such 
business  by  stockholding  or  otherwise.  Whenever  the  Secretary 
finds  that  any  packer  does  not  fully  and  correctly  disclose  all  trans- 
actions, the  Secretary  may  prescribe  the  manner  and  form  in  which 
such  accounts,  etc.,  shall  be  kept. 

Section  208  provides  that  section  6,  8,  9,  and  10  of  the  Federal  Trade 
Commission  act  be  made  applicable.  These  sections  of  the  Federal 
Trade  Commission  act  do  the  following : 

Section  6 authorizes  the  commission  to  make  investigations  and 
require  reports. 

Section  8 requires  Government  departments  to  furnish  informa- 
tion to  the  commission. 

Section  9 relates  to  subpoenas,  testimony,  and  immunity  from 
prosecution. 

Section  10  provides  penalties  for  refusing  to  testify,  for  false  re- 
ports, for  failure  to  make  reports  and  for  giving  out  information  by 
employees  of  the  commission. 


MEAT  PACKER. 


9 


Title  III  of  the  bill  deals  with  stockyards. 

Section  301  defines  stockyards,  stockyard  owner,  market  agency 
and  dealer. 

Section  302  defines  “commission”  as  the  Interstate  Commerce 
Commission  and  “stockyards”  as  a place  where  150,000  or  more 
head  of  cattle,  or  500,000  or  more  head  of  hogs  are  handled.  The 
commission  shall  ascertain  the  stockyards  which  come  within  the 
definition  and  shall  give  notice. 

Section  303  provides  that  30  days  after  commission  has  given 
public  notice,  no  person  shall  carry  on  business  of  a market  agency  or 
dealer  unless  he  has  registered. 

Section  304  provides  that  it  shall  be  the  duty  of  a stockyard  owner 
or  market  agency  to  furnish,  upon  request,  reasonable  stockyard 
services  without  discrimination. 

Section  305  provides  that  all  rates  and  charges  shall  be  just  and 
reasonable  and  nondiscriminatory. 

Section  306  provides  that  stockyard  owners  and  market  agencies 
shall  file  with  the  commission,  open  to  public  investigation  at  the 
stockyard,  schedules  showing  all  rates  and  charges.  Such  schedule 
shall  state  rates  and  charges  in  such  detail  as  the  commission  may 
require,  also  any  rules  and  regulations.  The  commission  may 
determine  and  prescribe  such  schedules.  No  changes  shall  be  made 
in  the  rates  or  charges,  except  after  ten  days’  notice.  The  commis- 
sion may  reject  and  refuse  to  file  schedules  as  tendered.  When- 
ever there  is  filed  with  the  commission  an}7'  schedule  stating  a new 
rate  or  charge  or  a new  regulation  or  practice  effecting  any  regular 
charge  the  commission  may  either  upon  complaint  or  upon  its  own 
initiative  enter  upon  hearings  concerning  the  lawfulness  of  such  rate. 
After  60  days  no  person  shall  carry  on  the  business  of  a stockyard 
owner  or  market  agency  unless  the  rates  and  charges  for  the  stockyard 
services  furnished  have  been  filed  and  published,  nor  charge,  demand, 
or  collect  a greater  or  less  or  different  amount  for  such  services. 
The  penalty  is  not  more  than  $500  for  each  offense  and  not  more 
than  $25  for  each  day.  Whoever  willfully  fails  to  comply  with  the 
provisions,  fine  not  more  than  $1,000. 

Section  307  makes  it  the  duty  of  stockyard  owners  to  observe  and 
enforce  just,  reasonable,  and  nondiscriminatory  regulations  and 
practices  in  respect  to  furnishing  stockyard  services. 

Section  308  provides  that  if  any  stockyard  owner,  market  agency, 
or  dealer  violates  sections  304,  305,  306,  or  307  or  any  order  of  the 
court  he  shall  be  liable  to  the  person  injured  thereby  for  the  full 
amount  of  damages  sustained. 

Section  309  provides  that  complaints  may  be  made  to  the  commis- 
sion by  petition  and  that  if  the  defendant  does  not  satisfy  the  com- 
plaint within  the  time  specified  it  shall  be  the  duty  of  the  commis- 
sion to  investigate;  further,  that  the  commission  may  at  any  time  in- 
stitute an  inquiry  on  its  own  motion;  and  the  commission  may  order 
defendant  to  pay.  If  not  complied  with  within  one  year,  defendant 
may  file  a petition  in  the  District  Court  of  the  United  States  for  the 
district.  Findings  and  orders  of  the  commission  shall  be  prima  facie 
evidence.  If  the  petitioner  finally  prevails  he  shall  be  allowed  a 
reasonable  attorney’s  fee. 

Section  310  provides  that  if  the  commission  is  of  the  opinion  that 
any  rate,  charge,  regulation,  or  practice  of  a stockyard  owner  or 


10 


MEAT  PACKER. 


market  agency  is  unjust,  unreasonable,  or  discriminatory,  the  com- 
mission may  determine  or  prescribe  what  will  be  just.  Also  the  max- 
imum or  minimum  to  be  charged. 

The  commission  may  make  an  order  that  such  owner  or  operator 
shall  cease  and  desist  and  shall  not  thereafter  publish,  demand,  or 
collect  any  rate  or  charge  other  than  the  rate  or  charge  so  prescribed, 
or  in  excess  of  the  maximum  or  less  than  the  minimum. 

Section  311  is  modeled  after  section  13  of  the  interstate  commerce 
act  in  respect  to  conflict  between  State  and  Federal  regulations. 

Section  312  provides  that  the  commission  may  order  stockyard 
owners,  market  agencies,  and  dealers  to  cease,  desist  from  unfair, 
unjust,  discriminatory,  or  deceptive  practice  or  device. 

Section  313  provides  that  certain  orders  of  the  commission  shall 
take  effect  within  not  less  than  five  days. 

Sections  314  and  315:  Dealer’s  forfeiture  makes  it  the  duty  of  the 
district  attorneys  to  prosecute. 

Section  316  provides  that  the  provisions  of  sections  12,  14,  16a,  17, 
and  19  and  the  first  1 0 paragraphs  of  section  20  of  the  interstate  com- 
merce act  as  amended  and  of  all  laws  relating  to  the  compelling  of 
testimony  before  a commission  and  the  immunity  of  witnesses  in  con- 
nection therewith,  or  to  the  suspending  or  restraining  the  enforce- 
ment, operation,  or  execution  of,  or  the  setting  aside  in  whole  or  in 
part  the  order  of  the  commission,  which  are  made  applicable  to  the 
jurisdiction,  powers,  and  duties  of  the  commission  in  enforcing  the 
provisions  of  this  title,  and  to  any  person  subject  to  the  provisions  of 
this  title,  except  that  the  commission  shall  have  no  authority  to  pre- 
scribe the  form  of  accounts,  records,  and  memoranda  of  a dealer, 
unless  it  finds  that  the  accounts,  records,  and  memoranda  kept  by 
such  dealer  do  not  fully  and  correctly  disclose  all  transactions  in- 
volved in  his  business,  including  the  true  ownership  of  such  business 
by  stock  holding  or  otherwise. 

Of  the  sections  of  the  interstate  commerce  act  referred  to  above : 

vSection  12  authorizes  the  commission  to  make  investigations  and 
take  testimony. 

Section  14  requires  the  commission  to  make  reports  of  its  investi- 
gations. 

Section  16a  provides  for  rehearings. 

Section  17  authorizes  the  commission  to  make  rules  for  its  proce- 
dure and  to  carry  on  its  work  by  divisions. 

Section  19  authorizes  the  commission  to  sit  and  prosecute  inquiries 
at  any  place. 

Section  20,  paragraphs  1 to  7,  authorizes  the  commission  to  require 
reports  and  accounts. 

Section  20,  paragraph  8,  prohibits  the  giving  out  of  information 
by  the  employees  of  the  commission. 

Section  20,  paragraph  9,  relates  to  mandamus  to  enforce  the 
commission’s  orders. 

Section  20,  paragraph  10,  authorizes  the  employment  of  special 
examiners  to  take  testimony. 

Title  IV  deals  with  the  ordinary  clauses  and  is  of  a general  nature. 

The  bill  is  designed  to  eliminate  evils  which  are  alleged  to  exist  in 
respect  to  unreasonable  practices  resulting  in  heavy  burdens  upon 
the  purchasers  and  consumers.  The  testimony  before  the  com- 
mittee in  the  Sixty-sixth  Congress  and  the  reports  of  the  Federal 


MEAT  PACKER. 


11 


Trade  Commission  clearly  indicate  existing  evils.  That  there  is  need 
for  immediate  legislation  on  the  subject  there  seems  to  be  no  ques- 
tion. A careful  study  of  the  bill  will,  I believe,  convince  one  that  it 
will,  if  enacted  into  law,  in  a measure  give  protection  to  the  pur- 
chasers of  live  stock,  independent  packers,  and  consumers  from  abuse 
and  oppression,  which  are  now  evident. 

AMENDMENTS. 

In  order  to  correct  typographical  errors  and  to  make  it  clear  that 
there  shall  be  no  dual  jurisdiction  in  the  bill  between  the  Interstate 
Commerce  Commission  and  the  Secretary,  and  further  to  make  it 
clear  that  the  Secretary  and  the  Interstate  Commerce  Commission 
shall  have  exclusive  jurisdiction,  the  following  amendments  are 
suggested : 

Page  9,  line  13,  strike  out  the  word  “ employer ” and  insert  the 
word  “ employee.” 

Page  11,  strike  out  lines  22,  23,  and  34,  and  lines  1 and  2 on  page 
12,  and  insert  in  lieu  thereof  the  following:  “The  term  ‘ dealer 7 
means  an}^  person  engaged  in  the  business  of  bu}dng  or  selling  in 
commerce  live  stock  at  a stockyard,  either  on  his  own  account  or  as 
the  employee  or  agent  of  the  vendor  or  purchaser;  but  does  not  in- 
clude a market  agency  or  a packer,  or  an  employee  or  agent  of  either.” 

Page  27,  line  1,  strike  out  all  after  the  comma  down  to  and  in- 
cluding the  third  comma  in  line  3,  and  in  line  5 strike  out  the  word 
“or,”  and  at  the  end  of  line  13  add  the  following:  “the  act  entitled 
‘An  act  to  create  a Federal  Trade  Commission,  to  define  its  powers 
and  duties,  and  for  other  purposes,’  approved  September  26,  1914, 
but  upon  the  enactment  of  this  act  the  authority  of  the  Federal 
Trade  Commission  under  section  5 of  such  act  of  September  26, 
1914  (unless  complaint  under  such  section  has  been  served  before 
the  enactment  of  this  act),  shall  be  terminated  so  far  as  relating  to 
any  matter  which  by  this  act  is  subject  to  the  jurisdiction  of  the 
Secretary  of  Agriculture  or  of  the  Interstate  Commerce  Commis- 
sion; or” 

Also  one  as  to  pleadings: 

Page  5,  line  15,  strike  out  the  words  “specifying  the  alleged  viola- 
tions” and  insert  in  lieu  thereof  the  following:  “stating  his  charges 
in  that  respect,”  and  at  the  end  of  line  24  add  the  following  sentence: 
“At  the  close  of  the  introduction  of  evidence  on  behalf  of  the  Govern- 
ment, or  at  any  time  prior  thereto,  the  Secretary  may  amend  the 
complaint  by  adding  new  charges;  but  in  case  of  such  amendment 
the  hearing  shall,  on  the  request  of  the  packer,  be  adjourned  for  a 
period  not  exceeding  15  days.” 

The  Chairman.  Mr.  Anderson,  are  you  ready  to  proceed  now  ? 

STATEMENT  OF  HON.  SYDNEY  ANDERSON,  A REPRESENTA- 
TIVE IN  CONGRESS  FROM  THE  STATE  OF  MINNESOTA. 

Mr.  Anderson.  Mr.  Chairman  and  gentlemen  of  the  committee,  1 
want  at  the  outset  to  express  my  pleasure  at  again  having  the  privi- 
lege of  appearing  before  this  committee,  with  which  I have  had  a 
somewhat  long  and  certainly  a very  interesting  association. 


12 


MEAT  PACKER. 


I also  want  to  express  my  appreciation  to  the  chairman  and  the 
members  of  the  committee  for  allowing  me  to  appear  first  on  the 
program.  The  problems  that  come  before  this  committee  are  not 
only  interesting  but  exceedingly  difficult  and  complex.  They  offer 
a very  large  opportunity  for  a lot  of  hard  work,  as  well  as  the  exercise 
of  great  constructive  ability,  and  I can  find  it  in  my  heart  to  regret 
that  I do  not  have  a closer  and  more  intimate  connection  with  the 
actual  drafting  of  the  legislation  of  the  committee,  as  I had  heretofore. 

I do  not  intend  to  discuss  the  necessity  for  this  legislation;  but  I 
may  say  that  back  of  it  there  is  a long  history  of  combination,  of 
agreements  to  apportion  markets,  to  apportion  supply,  a long  history 
of  litigation  resulting  in  the  making  of  restraining  orders,  enjoining 
members  of  the  Big  Five  and  others  from  engaging  in  combinations 
and  in  oppressive  practices  with  respect  to  competition,  which  I am 
sorry  to  say  have  more  or  less  characterized  the  action  of  the  Big 
Five  in  the  packing  business.  I should  say,  to  be  entirely  fair,  that 
some  of  the  things  that  were  done  probably  were  not  unlawful  at  the 
time  they  were  done,  but  the  facts  still  remain  that  there  is  behind 
this  legislation  a long  history  of  combination,  apportionment  of 
territory  and  of  markets,  as  well  as  the  oppression  of  competitors. 

What  I want  to  particularly  discuss  this  morning  is  not  the  need  of 
legislation  but  the  character  of  the  legislation  which  should  be 
enacted  and  the  essential  requirements  of  that  legislation  if  it  is  to 
be  effective. 

There  has  been  a contention  before  this  committee  that  the  forums 
of  law  were  open,  if  there  were  violations  of  law,  and  that  it  would  be 
sufficient  if  we  were  to  enact  into  law  definite  prohibitions  to  be 
enforced  by  the  usual  legal  methods. 

In  my  judgment  no  such  form  of  execution  can  be  in  the  slightest 
degree  effective  in  this  instance. 

In  the  first  place,  the  courts  are  already  congested  with  the  trial 
of  cases  which  have  criminal  character  on  one  side  or  civil  character 
on  the  other.  The  offenses  which  are  sought  to  be  reached  by  this 
legislation  are  not  necessarily  essentially  criminal.  They  are  offenses 
against  good  business;  they  are  offenses  against  the  sound  public 
policy  of  business. 

In  order  to  adequately  deal  with  offenses  of  this  character  which, 
in  statement,  must  of  necessity  be  more  or  less  indefinite,  it  is  essential 
that  an  agency  should  be  set  up  which,  through  the  process  of  in- 
vestigation and  of  trial  of  causes,  can  acquire  a fund  of  information,  a 
library  of  information,  if  I may  put  it  in  that  way,  as  to  the  movement 
of  the  raw  materials  and  the  finished  products  in  the  channels  of 
trade,  the  manufacturing  processes,  so  far  as  those  processes  are  an 
element  in  the  business  practices  of  those  to  be  regulated  by  this 
legislation. 

Fundamentally,  it  seems  to  me  the  primary  requisite  of  legislation 
regulating  the  packers  is  the  setting  up  of  an  agency  between  the 
producer  and  the  consumer  which  can  deal  more  or  less  informally 
with  all  of  those  who  normally  will  come  within  its  jurisdiction. 

Particularly,  I am  impressed  with  the  fact  that  there  should  be 
some  forum  in  the  stockyards  clothed  with  jurisdiction  to  deal 
with  the  grievances  that  arise  there  on  the  part  of  the  producers, 
the  shippers,  the  commission  men,  the  traders,  or  the  buyers,  and  I 
think  it  is  fundamental  that  whatever  agency  is  set  up  in  the  stock- 


MEAT  PACKER. 


13 


yards  should  have  jurisdiction  of  all  of  the  parties;  that  is  to  say, 
that  there  should  be  no  division  of  authority  with  respect  to  transac- 
tions in  the  stockyards. 

An  illustration  which  I think  will  justify  that  conclusion  is  this: 
When  the  railroad  companies  deliver  stock  in  the  unloading  chute 
the  liability  of  the  stockyards  company  for  the  safety  of  that  stock 
begins.  Once  that  stock  is  delivered  to  the  commission  man  and  his 
gates  locked  against  all  comers,  the  liability  of  the  stockyards  com- 
pany ceases  for  the  moment  and  the  liability  of  the  commission  firm 
commences.  Again,  when  the  stock  is  weighed,  the  bell  is  rung,  the 
stock  is  again  delivered  to  the  stockyards  company  for  delivery  to  the 
buyer,  and  so  at  that  point  the  liability  of  the  commission  man  ceases 
and  the  liability  of  the  stockyards  company  again  begins. 

If  you  do  not  have  a single  jurisdiction  over  all  of  those  who  at 
one  time  or  another  may  have  a liability  or  a duty  with  respect  to 
the.  cattle,  your  regulation  will  fall  between  two  stools.  If  you 
jurisdiction  fails  as  to  the  commission  man  and  it  is  found  by  the 
regulating  authority  that  the  stockyards  company  has  no  liability 
but  that  the  commission  man  has  a liability,  your  regulating  authority 
will  be  without  power  to  enforce  its  conclusions  with  respect  to  and 
against  the  commission  company.  The  same  thing  is  true  with 
respect  to  traders  or  others  in  the  yards. 

One  thing  which  I think  is  fundamental  in  that  respect  is  that  there 
should  be  one  single  authority  dealing  with  the  stockyards  and  every- 
body engaged  in  transactions  upon  them. 

I think  it  is  equally  clear  that  there  should  be  a single  tribunal 
dealing  with  offenses  which  may  be  committed  by  those  whom  the 
bill  designates  as  packers. 

The  bills  that  have  been  introduced  differ  with  respect  to  the 
authority  which  is  to  be  set  up  for  the  enforcement  of  the  pro- 
visions relating  to  the  packers. 

In  the  bill  which  I introduced  that  authority  is  conferred  upon 
the  Federal  Trade  Commission.  In  the  bill  which  the  chairman  has 
introduced,  that  authority  is  conferred  upon  the  Secretary  of  Agri- 
culture. In  the  bill  which  Mr.  McLaughlin,  of  Nebraska,  has  intro- 
duced, if  I understand  it  correctly,  the  authority  is  conferred  upon 
a commission  created  by  that  act. 

Mr.  Tincher.  Let  me  ask  a question  there.  Mr.  McLaughlin,  is 
your  bill  the  Kenyon  bill  which  was  passed  in  the  Senate  ? 

Mr.  McLaughlin  of  Nebraska.  No;  the  Gronna  bill. 

Mr.  Jones.  Are  those  the  primary  and  essential  differences  in 
the  three  bills  ? 

Mr.  Anderson.  So  far  as  the  bill  which  Mr.  Haugen  has  intro- 
duced and  the  one  which  I have  introduced,  that  is  the  primary 
difference.  With  respect  to  the  bill  Mr.  McLaughlin,  of  Nebraska, 
has  introduced,  there  are  a number  of  differences.  The  whole 
theory  of  regulation  under  the  McLaughlin  bill,  which  is  the  Gronna 
bill,  is  different  from  the  theory  of  regulation  which  is  prescribed 
in  either  the  bill  which  Mr.  Haugen  has  introduced  or  the  one  which 
I have  introduced. 

The  Chairman.  Your  bill  is  identical  with  the  bill  reported  by 
the  subcommittee. 

Mr.  Anderson.  Yes,  sir. 


14 


MEAT  PACKER. 


The  Chairman.  The  only  change  is  to  transfer  the  control  to 
the  Secretary  of  Agriculture  instead  of  the  Federal  Trade  Commission. 

Mr.  Aswell.  Is  the  McLaughlin  bill  the  result  of  the  conference 
report  on  the  bill  ? 

Mr.  Anderson.  No;  the  McLaughlin  bill  is  the  biJl  which  passed 
the  Senate  in  the  last  Congress. 

Mr.  Aswell.  And  embodies  practically'  the  same  bill  that  was 
agreed  upon  in  conference. 

Mr.  Anderson.  There  was  not  any  conference. 

Mr.  Kincheloe.  Is  your  bill  the  same  bill  that  was  reported  from 
this  committee  to  the  House  ? 

Mr.  Anderson.  Yes;  with  the  exception  that  the  committee 
adopted  an  amendment  placing  the  jurisdiction  over  the  packers  in 
the  Secretary  of  Agriculture,  whereas  my  bill  puts  that  jurisdiction 
in  the  Federal  Trade  Commission. 

Mr.  Kincheloe.  And  the  bill  that  passed  the  Senate  provided  for 
a special  commission. 

Mr.  Anderson.  Yes;  that  bill  provided  for  a special  commission. 
I do  not  know  that  it  is  a matter  of  first  importance  as  to  where 
the  jurisdiction  over  the  packing  industry  rests;  but  I would  like  to 
state  the  condiderations  which  ]ed  me  to  the  conclusion  that  that 
jurisdiction  ought  to  be  conferred  upon  the  Federal  Trade  Com- 
mission. 

I should  say  in  that  connection  that  I can  appreciate  the  feeling  on 
the  part  of  those  who  are  to  be  regulated  by  this  legislation,  if  it  is 
enacted  into  law,  that  the  Federal  Trade  Commission  as  presently 
constituted  and  as  it  has  been  constituted  heretofore,  has  shown  a 
disposition  which  they  feel  is  not  entirely  fair  to  them;  but  if  the 
Federal  Trade  Commission  is  not  so  constituted  that  it  can  be  charged 
with  such  duties  as  Congress  thinks  ought  to  be  imposed  upon  it, 
then  the  commission  ought  to  be  abolished  or  a new  commission 
selected. 

I proceed  now  to  the  considerations  which  led  me  to  the  conclu- 
sion that  the  Federal  Trade  Commission  was  the  proper  tribunal 
upon  which  to  confer  this  jurisdiction. 

We  now  have  on  the  statute  books  the  act  creating  the  Federal 
Trade  Commission.  That  act  prohibits  unfair  methods  of  competi- 
tion. The  pending  bills  prohibit  unfair  practices  and  devices  in 
commerce. 

I take  it  that  there  are  some  actions  which  might  be  committed 
by  persons  regulated  under  this  act  which  would  be  both  unfair 
methods  of  competition  and  unfair  practices  in  commerce.  The 
result  of  a division  of  authority,  therefore,  assuming  that  the  power 
to  regulate  the  packers  is  placed  with  the  Secretary  of  Agriculture,, 
would  be  that  you  would  have  one  set  of  decisions  growing  out  of 
the  enforcement  of  the  unfair  methods  of  competition  provision  in 
the  Federal  Trade  Commission  Act  as  to  all  industries  generally  with 
another  set  of  decisions  growing  up  under  the  Secretary  of  Agri- 
culture involving  somewhat  the  same  acts  under  the  prohibition 
against  the  unfair  practices  in  commerce,  and  it  was  my  judgment 
that  by  putting  the  enforcement  of  the  provisions  of  these  bills 
applicable  to  the  packers  under  the  Federal  Trade  Commission  it 
would  be  possible  to  secure  some  degrees  of  uniformity,  at  least,  in 


MEAT  PACKER. 


15 


the  decisions  with  respect  to  industries  generally  and  with  respect 
to  the  decisions  as  applicable  to  the  packers  as  a class. 

In  substance,  they  were  the  considerations  which  led  me  to  the 
conclusion  I reached.  Now,  there  may  be  arguments  on  the  other 
side  which  would  lead  to  a contrary  conclusion,  but  in  my  mind 
the  difficulties  arising  from  conflicts  of  decisions  with  respect  to  the 
packers  as  a class  and  industry  generally,  through  a division  of 
authority,  outweighed  any  other  consideration  that  came  to  my 
mind. 

There  is  in  both  the  bill  introduced  by  Mr.  Haugen  and  in  the  bill 
which  I introduced,  a provision  which  I think  is  entirely  new  in  Federal 
legislation.  It  is  the  provision  on  page  2 in  the  third  paragraph 
which  undertakes  to  define  commerce  in  a somewhat  different  way 
than  it  has  heretofore  been  defined. 

The  second  paragraph  on  page  2 is  the  usual  definition  of  commerce 
and  provides  that  the  term  commerce  as  used  in  the  act  means  com- 
merce among  the  several  States  or  with  foreign  nations,  etc.  The 
provision  to  which  I have  referred  provides  that: 

For  the  purpose  of  this  act  (but  not  in  any  wise  limiting  the  foregoing  definition)  a 
transaction  in  respect  to  any  article  shall  be  considered  to  be  in  commerce  if  such 
article  is  part  of  that  current  of  commerce  usual  in  the  live-stock  and  meat-packing 
industries,  whereby  live  stock,  live-stock  products,  dairy  products,  poultry,  poultry 
products,  or  eggs  are  sent  from  one  State  with  the  expectation  that  they  will  end  their 
transit,  after  purchase,  in  another;  including,  in  addition  to  cases  within  the  above 
general  description,  all  cases  where  purchase  or  sale  is  either  for  shipment  to  another 
State,  or  for  slaughter  of  live  stock  within  the  State  and  the  shipment  outside  the 
State  of  the  products  resulting  from  such  slaughter.  Articles  normally  in  such  current 
of  commerce  shall  not  be  considered  out  of  such  current  through  resort  being  had  to 
any  means  or  device  intended  to  remove  transactions  in  respect  thereto  from  the 
provisions  of  this  act.  For  the  purpose  of  this  paragraph  the  word  “ State  ” included 
Territory,  the  District  of  Columbia,  possession  of  the  United  States,  and  foreign  nation. 

This  provision  resulted  from  a consideration  of  the  decisions  of 
the  Supreme  Court  with  respect  to  transactions  upon  live-stock 
exchanges,  notably  the  Hopkins  case,  in  which  it  was  held,  if  my 
recollection  serves  me  correctly,  and  I have  not  read  the  case  for 
some  time,  that  an  agreement  between  commission  men  with  respect 
to  a transaction  in  stockyards  situated  wholly  within  one  State 
was  not  an  agreement  in  violation  of  the  Sherman  antitrust  law  for 
the  reason  that  such  transactions  in  the  stockyards  did  not  constitute 
commerce. 

There  was,  however,  in  the  decision  very  strong  intimation  that  if 
the  objects  and  the  acts  done  under  the  agreement  were  in  effect  a 
burden  upon  commerce  that  an  entirely  different  question  would 
have  been  raised. 

Subsequent  to  the  Hopkins  decision  the  Supreme  Court  rendered 
a decision  in  the  Swift  case  which  I believe  modified  the  rule  which 
the  court  laid  down  in  the  Hopkins  case. 

As  I recall  the  facts  in  that  case,  the  decree  prohibited  certain 
acts  with  respect  to  transactions  which  were  not  in  the  purview  of 
what  we  then  understood  commerce  to  mean,  transactions  in  inter- 
state commerce,  and  the  decree  of  the  lower  court  was  objected  to 
on  that  ground. 

The  court,  in  considering  that  question,  said: 

When  cattle  are  sent  for  sale  from  a place  in  one  State,  with  the  expectation  they 
will  end  their  transit  for  purchase  in  another,  and  when  in  effect  they  do  so  with  only 


16 


MEAT  PACKER. 


the  interruption  necessary  to  find  a purchaser  at  the  stockyards,  and  when  this  is  the 
typical,  constantly  recurring  course  the  current  thus  existing  is  a current  of  com- 
merce among  the  States,  and  the  purchase  of  the  cattle  is  a part  and  incident  of  such 
commerce. 

Now,  I am  of  the  opinion  that  that  is  clearly  a modification  of  the 
rule  laid  down  in  the  Hopkins  case,  and  that  it  is  competent  for  us, 
under  the  interstate  commerce  clause  of  the  Constitution,  following 
this  decision  of  the  Supreme  Court,  to  treat  commerce  in  cattle 
and  the  products  thereof  as  a complete  chain  of  commerce  and  to 
regulate  that  entire  chain  of  commerce  to  the  extent  that  it  may  be 
necessary  to  effectually  regulate  a part  of  it  that  is  actually  commerce 
between  the  States,  and  I put  this  provision  in  the  law  as  a sort  of 
notice  in  case  the  question  should  be  raised  as  to  the  purpose  the 
Congress  had  in  the  enactment  of  this  law  to  deal  with  the  entire 
subject  of  cattle  or  of  its  products  moving  in  this  channel  of  com- 
merce to  which  the  court  refers  in  the  Swift  case. 

Mr.  Jones.  Just  a question  there.  In  the  Hopkins  case  did  the 
court  hold  that  a transaction  in  the  stockyards  that  pertained  to 
cattle  or  meats  should  be  shipped  in  interstate  commerce  was  not  a 
part  of  interstate  commerce  ? 

Mr.  Anderson.  I think  that  was  substantially  the  decision, 
although  the  court  did  not  expressly  find  that.  The  question  that 
arose  there  was  whether  the  contracts  between  the  commission  men 
constituted  an  agreement  in  violation  of  the  Sherman  Antitrust  Act, 
and  the  court  held  it  did  not  because  the  sale  and  purchase  of  cattle 
in  the  stockyards,  situated  in  a State,  was  not,  standing  alone, 
interstate  commerce;  but  in  the  Swift  case  they  held  that  these 
transactions,  considered  as  a part  of  a general  movement  in  the 
channels  of  commerce,  might  result  in  such  a burden  upon  commerce 
as  to  subject  them  to  such  regulation  as  was  incidental,  at  least, 
to  the  regulation  of  the  part  which  was  clearly  interstate  commerce. 
Do  I make  that  clear  ? 

Mr.  Jones.  I had  known,  in  other  lines,  that  the  tendency  of  the 
court  had  been  to  take  cognizance  of  all  actions  in  connection  with 
interstate  commerce  and  to  construe  it  as  a part  of  commerce  that 
I was  somewhat  surprised  at  your  statement  of  the  decision  in  the 
Hopkins  case,  with  which  I was  not  familiar. 

Mr.  Anderson.  There  is  another  case,  I believe,  known  as  the 
Anderson  case,  substantially  to  the  same  effect,  although  I can  not 
give  you  the  citation. 

Clearly,  if  these  decisions  should  stand  in  their  full  effect  without 
modification — — - 

Mr.  Aswell  (interposing) . Then  that  provision  in  your  bill  would 
be  necessary. 

Mr.  Anderson.  This  provision  would  be  necessary,  and  we  might 
go  even  further  than  that  and  say  that  if  the  court  adheres  to  that 
position,  without  respect  to  anything  you  may  put  in  this  bill,  your 
regulation  will  be  entirely  futile,  and  I think  that  is  one  of  the  essen- 
tial infirmities  of  the  Gronna  bill,  that  if  the  court  should  hold,  as  it 
has  held  before,  transactions  in  the  stockyards  are  not  interstate 
commerce  and  are  not  subject  to  Federal  regulation,  the  whole  scheme 
of  regulation  therefore  fails.  Unless  we  can  find  some  means  or  some- 
thing in  the  decisions  of  the  courts  which  will  bring  these  trans- 
actions which  are  a part  of  the  general  current  of  commerce  within 


MEAT  PACKER. 


17 


the  purview  of  the  regulation  of  the  Federal  Government,  this  legis- 
lation will  all  fail  of  its  purpose. 

Mr.  Kincheloe.  There  would  be  no  way  for  Congress  to  reach 
it  at  all. 

Mr.  Anderson.  So  far  as  it  relates  to  transactions  in  the  stock- 
yards,  there  is  no  question  about  that. 

The  definition  of  the  term  “packer”  is  found  in  section  201  on 
page  3 of  the  bill,  and  is  an  attempt  to  reach,  in  some  way,  the  prob- 
lems that  have  arisen  in  connection  with  the  so-called  unrelated 
business  of  the  packers. 

The  hearings  before  the  committee,  I think,  demonstrated  a dis- 
position on  the  part  of  the  large  packers  to  extend  their  activities  into 
many  lines  which  were  not  directly  connected  with  them  and,  through 
subsidiaries  and  interlocking  directorates  and  joint-stock  ownership 
or  community  of  stock  ownership,  to  control  a very  widely  diverging 
class  of  articles. 

The  bill  which  I originally  introduced,  and  I think  the  Gronna 
bill  as  well,  undertakes  to  deal  with  that  subject  on  the  basis  of 
direct  prohibitions  against  the  packer  from  engaging  in  certain  of 
these  unrelated  lines.  I think  a consideration  of  the  operations  of 
such  a provision  will  demonstrate,  in  the  first  place,  that  it  is  of 
doubtful  legality,  and,  in  the  second  place,  that  it  is  of  doubtful 
utility;  that  is  to  say,  it  will  be  found  practically  impossible  by 
direct  prohibitions  to  prevent  the  extension  of  the  influence  of  the 
existing  packing  companies  into  related  or  unrelated  lines  of  ac- 
tivity. 

In  the  bill  I have  introduced,  as  well  as  in  Mr.  Haugen’s  bill,  we 
do  not  seek  to  deal  with  this  proposition  on  the  basis  of  direct  pro- 
hibition at  all.  We  do  not  undertake  to  say  that  it  shall  be  unlawful 
for  a man  engaged  in  the  packing  business,  or  in  marketing  packing 
house  products,  to  engage  in  any  other  business  that  he  pleases. 

We  undertake  to  say  that  if  a person  engaged  in  the  packing 
business — and  when  I say  person,  of  course,  I include  corporations — - 
undertakes  to  extend  its  control  over  other  commodities,  through 
the  ownership  of  stock  or  otherwise,  that  the  products  of  the  com- 
pany over  which  it  has  extended  its  sphere  of  influence  shall  be  sub- 
ject to  the  same  regulation  as  the  products  of  the  packers  them- 
selves. 

I think  that  is  a perfectly  legal  provision.  I think  it  is  a per- 
fectly sound  principle,  that  we  shall  not  only  regulate  the  packers 
and  the  products  which  they  themselves  produce,  but  that  we  shall 
| regulate  in  commerce  the  products  of  companies  which  are  within 
their  sphere  of  influence,  either  through  community  of  stock  owner- 
! ship  or  otherwise,  or  direct  stock  ownership. 

I said  a moment  ago  that  the  theory  of  regulation  which  was 
adopted  in  the  bill  which  Mr.  Haugen  introduced  and  the  bill  which 
I introduced  is  very  different  from  the  theory  of  regulation  which  is 
adopted  in  the  McLaughlin  bill  and  the  Gronna  bill. 

The  McLaughlin  bill  and  the  Gronna  bill  seek  to  regulate  the 
packers  by  giving  to  a commission  set  up  in  the  bill  general  power 
to  make  rules  and  regulations  for  the  enforcement  of  the  act.  Under 
it,  a regulation  could  be  made  to-day,  without  hearing,  a violation  of 
which  on  the  part  of  a packer  would  be  a criminal  offense. 

46985—21 2 


18 


MEAT  PACKER. 


It  is  my  judgment  that  people  who  are  to  be  regulated  by  law  are 
entitled  to  a consideration  which  such  a provision  does  not  give. 
General  regulations  also  contemplate  restrictive  provisions  constantly 
applicable,  which  are  very  apt  to  interfere  with  that  freedom  of 
management  of  the  business  of  the  packer  which  is  absolutely  essen- 
tial, in  my  judgment,  if  we  are  to  have  the  highest  degree  of  efficiency 
in  the  management  of  the  packing  business. 

We  have  had  an  experience  with  the  railroad  companies  under 
general  Federal  control,  which  permitted  the  adoption  of  rules  and 
regulations  universally  applicable  and  which  interfered  with  the 
liberty  of  management  on  the  part  of  those  financially  responsible 
for  the  success  of  the  railroad  companies.  I do  not  think  that  that 
control  was  a howling  success.  I would  not  want  to  see  the  same 
kind  of  control  exercised  over  the  packers  because  I believe  its  effect 
would  be  to  decrease  their  efficiency  and  consequently  implement 
certain  costs  incident  to  that  efficiency  either  against  the  consumer 
or  the  producer. 

There  is  also  this  to  be  taken  into  consideration  in  connection  with 
extending  to  any  governmental  authority  the  general  power  of  regu- 
lation over  an  industry  as  a whole:  There  still  is  in  the  packing  indus- 
try a certain  number  of  independent  concerns.  When  I say  that,  of  . 
course,  I do  not  mean  to  allege  that  there  is  conclusive  proof  of  any 
combination  on  the  part  of  the  Big  Five.  However,  it  has  been  cus-  . 
tomary  to  divide  the  volume  of  business  in  the  country,  generally, 
between  the  Big  Five  and  the  independents. 

I think  there  will  be  no  question  about  this  statement,  that  the  ? 
relative  amount  of  business  done  by  the  BigFive,  both  in  the  purchase  ; 
of  cattle  and  hogs  and  sheep  and  the  sale  of  the  products  thereof,  has  ; 
steadily  increased  over  the  proportion  done  by  the  independents  as  a . 
whole,  and  this  in  spite  of  the  fact  that  the  independents,  during  the  : 
last  few  years,  and  particularly  during  the  war,  have  made  very  great  ■ 
progress  in  the  volume  of  their  business.  I remember  that  it  was  the  ] 
opinion  of  practically  every  one  of  them  who  appeared  before  this  | 
committee  that  their  volume  of  business  in  the  aggregate  had  in- ' 
creased  in  proportion  to  the  volume  which  was  done  by  the  Big  Five, } 
but  they  were  mistaken  about  it.  While  their  volume  had  increased  ; 
in  a very  large  proportion,  the  volume  of  the  Big  Five  had  still  further 
increased,  so  that  it  was  doing  a larger  proportion  of  the  business  in 
1920  than  it  did  in  1910  or  1915. 

The  point  I am  getting  at,  however,  is  this,  that  when  you  impose 
general  regulations  you  must  impose  those  regulations  upon  the  little 
fellow  as  well  as  upon  the  big  fellow,  and  the  regulations,  because  of 
the  fact  that  the  costs  as  to  the  little  fellow  can  be  spread  over  a 
much  smaller  volume  of  business,  always  rests  more  heavily  upon  the 
little  fellow  than  it  does  upon  the  big  fellow. 

Consequently,  we  sought  a means  of  getting  away  from  that 
situation,  because  I think  that  if  there  is  one  thing  that  is  desirable 
in  this  situation  it  is  that  there  should  be  in  the  country  strong, 
independent  competition  in  the  packing  business,  and  it  is  my  guess, 
although  I have  no  personal  knowledge  of  it,  that  the  large  packers 
themselves  realize  that  sound,  healthy,  independent  competition  is 
a good  thing  for  them  as  well  as  for  the  country. 


MEAT  PACKER. 


19 


Therefore,  in  drafting  the  bill,  which  I had  the  privilege  of  having 
some  part  in  formulating,  we  undertook  to  get  away  from  the  propo- 
sition of  imposing  general  regulations  upon  the  industry  as  a whole, 
and  in  order  to  do  that  we  followed  the  procedure  which  is  now 
provided  in  part  in  the  Federal  Trade  Commission  act  as  to  the 
packers. 

Under  this  procedure  if  a packer  engages,  or  if  a number  of  packers 
engage,  in  a practice  which  is  in  violation  of  the  provisions  of  the 
act,  he  is  called  before  the  Federal  Trade  Commission,  or  the  other 
regulating  authority  set  up,  and  required  to  show  cause  as  to  why 
that  practice  should  not  be  discontinued.  There  is  a hearing  upon 
the  question  in  which  the  packer  has  an  opportunity  to  be  heard, 
and  if  the  commission  determines  that  the  practice  is  one  prohibited 
by  law,  within  the  general  prohibitions  of  the  act,  it  shall  issue  an 
order  to  the  packer  or  packers  involved  to  cease  and  desist  from 
that  practice.  From  that  order  the  packer  has  the  right  of  appeal. 

When  the  order  becomes  conclusive,  either  by  failure  to  appeal  or 
by  its  being  affirmed  by  the  court,  a further  violation  of  the  order 
becomes  a criminal  offense  subject  to  penalty.  I do  not  think  any- 
one will  claim  that  that  is  a drastic  or  an  unreasonable  procedure  or 
one  which  deprives  those  regulated  of  any  right  which  they  are 
entitled  to  have,  when  charged  with  a violation  of  the  provisions  of 
this  bill. 

Mr.  Kincheloe.  In  other  words,  Mr.  Anderson,  is  it  true  that 
under  the  provisions  of  your  bill  the  second  or  subsequent  offenses 
will  be  subject  to  a criminal  penalty  and  not  the  first  offense. 

Mr.  Anderson.  That  does  not  exactly  state  the  situation.  No 
penalty  attaches  until  it  has  been  determined  that  the  particular  act 
done  constitutes  a violation  of  the  law  and  the  packers  engaging  in 
that  practice  have  been  ordered  not  to  do  it  any  more  and  that  order 
has  become  final. 

Mr.  Kincheloe.  Then  if  they  do  persist  they  are  subject  to  a 
criminal  penalty  ? 

Mr.  Anderson.  Yes. 

Mr.  Kincheloe.  Is  that  true  under  the  Gronna  bill? 

Mr.  Anderson.  It  is  not  entirely  clear.  I have  not  read  the  Gronna 
bill  for  some  time,  but  my  recollection  is  there  is  a procedure  in  the 
bill  somewhat  similar  to  the  one  which  I have  outlined ; but  in  addi- 
tion to  that  there  is  power  to  issue  general  rules  and  regulations,  and 
the  violation  of  one  of  those  rules  and  regulations,  or  an  act  commit- 
ted which  is  a violation  of  those  rules  and  regulations,  is  a criminal 
offense. 

When  you  are  dealing  with  business  practices,  where  it  is  neces- 
sary that  you  shall  have  a certain  amount  of  freedom  of  action  and 
of  initiative,  you  will  hamstring  the  whole  business,  in  my  judgment, 
if  you  undertake  to  deal  with  it  on  the  basis  of  bureaucratic  regula- 
tions made  to-day,  the  violation  of  which  to-morrow  is  a criminal 
offense. 

Mr.  Kincheloe.  Of  course;  I was  not  asking  for  the  purpose  of 
argument. 

Mr.  Anderson.  Yes;  I understood  that. 

Mr.  Kincheloe.  But  merely  to  get  information  as  to  the  distinc- 
tion between  the  two  bills. 


20 


MEAT  PACKER. 


Mr.  Anderson.  I think  the  objections  to  the  Gronna  bill  are  very 
numerous,  particularly  the  legal  objections.  I think  every  statement 
that  is  made  in  the  report  of  the  chairman  of  this  committee  in  con- 
nection with  the  bill  which  he  reported  out  last  year  as  a substitute 
for  the  Gronna  bill  is  absolutely  sound,  and  I think  it  would  pay  the 
members  of  this  committee,  if  they  have  not  done  so,  to  read  that 
report,  because  it  contains  a very  clear  and  a very  illuminating  analy- 
sis of  the  differences  between  the  Gronna  bill  and  the  bill  which  Mr. 
Haugen  reported  and  has  again  introduced  as  to  the  method  of  pro- 
cedure and  the  objections  to  the  procedure  which  is  followed  in  the 
Gronna  bill. 

Mr.  Tincher.  I agree  with  the  gentleman  about  that,  and  as  the 
reports  on  the  Haugen  bill  are  exhausted,  let  me  suggest  that  you 
have  that  report  made  a part  of  your  statement. 

Mr.  Anderson.  I will  be  very  glad  to  have  the  report  made  a 
part  of  my  remarks,  if  that  is  agreeable  to  the  chairman.  I think 
it  would  be  desirable  to  have  it  reprinted,  because  it  does  contain  a 
very  clear  and  a very  illuminating  analysis  of  the  difference  between 
the  two  bills. 

The  Chairman.  And  in  that  connection,  the  legislative  drafting 
service  should  be  given  credit  for  much  of  that  report. 

Mr.  Anderson.  I want  to  say  that  the  legislative  drafting  service 
is  not  only  entitled  to  credit  for  the  report,  but  is  entitled  to  credit 
for  some  very  able  assistance  in  the  drafting  of  this  legislation. 

The  Chairman.  Mr.  Anderson  and  I agree  that  we  are  under  great 
obligations  to  the  legislative  drafting  service  in  drafting  this  bill 
and  in  drafting  the  report. 

Mr.  Kincheloe.  Mr.  Anderson,  on  account  of  your  knowledge  by 
reason  of  your  extensive  investigation  of  this  matter,  I read  your 
statement  before,  and  if  I understood  you,  in  that  statement,  as 
between  the  Gronna  bill  and  the  bill  reported  to  the  House  by  this 
committee,  as  to  the  personnel  of  the  authority  to  regulate,  you 
preferred  the  commission  provided  in  the  Gronna  bill  in  preference 
to  the  power  being  vested  in  the  Secretary  of  Agriculture;  that  is,  as 
between  those  two  bills,  is  that  true  ? 

Mr.  Anderson.  I do  not  think  I ever  expressed  any  opinion  about 
that  particular  proposition.  I did  not  appear  before  the  committee 
except  at  the  very  inception  of  the  consideration  of  the  bill  and  I 
do  not  think  I made  any  statement  about  it. 

Mr.  Kincheloe.  I may  be  mistaken  about  that  but  that  is  the 
impression  I had. 

Mr.  Anderson.  There  is  the  same  objection,  however,  to  the 
setting  up  of  a separate  commission  as  there  is  to  the  setting  up  of 
the  Secretary  of  Agriculture;  that  is,  the  possibility  of  a conflict  of 
decisions. 

Mr.  Kincheloe.  Yes. 

Mr.  Anderson.  As  I said  before,  there  may  be  considerations  on 
the  other  side  which  outweigh  that  objection  or  consideration.  For 
instance,  it  may  be  said  that  the  packers  are  now  subject  to  the 
jurisdiction  of  the  Secretary  of  Agriculture  in  a number  of  particulars, 
notably  with  respect  to  the  enforcement  of  the  pure  food  laws,  meat- 
inspection  laws,  and  so  forth,  and  that  there  has  already  been  es- 
tablished a relationship  between  the  packers  and  the  Secretary  of 
Agriculture  or  the  Agricultural  Department  which  it  is  desirable  to 


MEAT  PACKER. 


21 


take  into  consideration  in  connection  with  the  enforcement  of  such 
a bill  as  this.  So  far  as  I am  concerned,  as  I said  before,  I do  not 
know  that  that  is  a matter  of  primary  importance.  It  is  certainly 
one  upon  which  there  may  be  a difference  of  opinion. 

I think  that  is  substantially  all  I want  to  say  about  the  bills  at  this 
time,  except  that  in  the  provisions  with  respect  to  the  stockyards 
we  follow  substantially  the  provisions  now  in  force  with  reference 
to  rates  and  practices  on  the  railroads,  in  the  belief  that  there  was  a 
similarity  in  the  problems  to  be  solved  between  the  rates  and  prac- 
tices on  the  railroads  and  the  facilities  which  they  are  to  furnish 
and  the  rates  and  practices  in  the  stockyards  and  the  facilities  to  be 
furnished  there.  The  same  character  of  questions  arises  in  both 
cases,  and  we  thought  that  the  Interstate  Commerce  Commission, 
with  the  experience  which  it  has  already  had  in  dealing  with  those 
questions,  was  better  qualified  to  deal  with  them  in  the  stockyards 
than  any  other  agency. 

Now,  Mr.  Sullivan  referred  to  the  fact  that  the  State  of  Minnesota 
now  has  a provision  for  the  regulation  of  the  stockyards  in  that 
State.  Under  that  law  the  stockyards  and  traders  and  commission 
men  are  subject  to  the  jurisdiction  of  the  Railway  and  Warehouse 
Commission.  The  Railway  and  Warehouse  Commission  has  set  up 
an  agency  in  the  stockyards  which  deals  with  the  grievances  and 
the  complaints  and  the  conditions  that  arise  in  the  stockyards. 

I hope  the  committee  will  hear  Mr.  Wells,  who  is  in  direct  charge 
of  the  regulation  of  the  stockyards  at  South  St.  Paul.  I think  he  can 
give  the  committee  a great  deal  of  information  which  will  be  valuable 
to  them  in  consideration  of  this  general  legislation.  He  is  anxious 
and  I am  anxious  that  the  regulation  which  we  have  established 
there  should  not  be  disturbed. 

I am  frank  to  say  that  if  it  were  possible  to  have  local  State  regu- 
lation of  the  stockyards,  substantially  uniform  in  character,  I believe 
State  regulation  to  be  preferable  to  Federal  regulation.  I am,  in 
general,  of  the  opinion  that  the  nearer  you  can  bring  the  regulating 
authority  to  the  people,  the  more  likely  you  are  to  have  regulations 
which  are  applicable  to  local  conditions.  In  Minnesota  they  have 
established  a contact  between  the  railway  and  warehouse  commis- 
sion or  its  agent  in  the  stockyards  and  the  producers  and  the  shippers 
and  the  commission  men  and  the  buyers,  which  I think  has  been 
exceedingly  helpful  in  the  solution  of  the  problems  that  have  arisen 
there.  The  regulation,  I am  told,  has  saved  the  shippers  of  the 
country  thousands  of  dollars  in  charges  for  yardage,  feed,  and  other 
costs  arising  in  the  yards.  It  has  resulted  in  administrative  improve- 
ments, very  much  in  the  interest  of  the  producers  as  well  as  in  the 
interest  of  the  stockyards  company  and  the  commission  men. 

I am  told  that  the  fact  that  State  regulation  of  stockyards  in 
South  St.  Paul  exists  has  been  a very  large  factor  in  inducing  business 
in  those  yards.  It  has  been  of  tremendous  advertising  value  to  the 
stockyards  company  and  to  the  commission  men  in  South  St.  Paul. 

As  I have  said,  we  are  anxious  to  preserve  State  regulation.  I 
have  prepared  an  amendment  which  I think  will  do  it  and  which 
will  be  presented  by  Mr.  Wells  when  he  is  heard  by  the  committee. 

I hope  the  committee  will  hear  him  at  some  length,  because  I think 
he  has  something  to  say  that  will  be  of  interest  from  the  standpoint 


22 


MEAT  PACKER. 


of  Federal  regulation  as  well  as  from  the  standpoint  of  State  regula- 
tion. 

Mr.  Kincheloe.  Of  course  I have  not  had  opportunity  to  read 
your  bill  as  fully  as  I shall  do,  and  I am  sure  you  appreciate  the 
handicap  a man  labors  under  coming  on  the  committee  as  a new 
member  and  not  having  heard  the  former  hearings.  So  I will  ask 
you  a question  or  two.  Do  you  think  there  is  any  evil  to  the  public 
in  general  through  the  packers  owning,  controlling,  and  operating 
their  own  stockyards  ? 

Mr.  Anderson.  Mr.  Kincheloe,  I do  not  think  it  is  a question  of 
ownership.  There  is  some  advantage  which  might  arise  to  a packer 
as  the  result  of  ownership  of  stockyards.  Probably,  however,  that 
advantage  is  a fair  business  advantage.  That  is  to  say,  the  packer 
who  owns  a stockyard  into  which  cattle  come  which  are  bought  not 
only  by  him  but  by  everybody  else  takes  a certain  amount  of  toll 
from  all  those  cattle,  and  he  is  benefited  as  much  in  that  toll  by  the 
cattle  that  are  bought  by  other  packers  as  by  the  cattle  bought  by 
himself.  He  has  in  that  volume  a certain  business  advantage  in  the 
yards  over  the  man  who  does  not  own  any  stock  in  those  stockyards. 

I do  not  think  there  is  any  doubt  about  that.  On  the  other  hand, 
from  the  standpoint  of  regulation  it  does  not  seem  to  me  it  makes  any 
difference  who  owns  the  stockyards.  The  question  we  are  interested 
in  is:  How  are  the  stockyards  conducted?  Are  they  conducted  in 
such  a way  that  no  unfair  advantage  is  taken  of  the  producer,  who 
can  not  protect  himself,  and  is  there  no  unfair  advantage  taken  of  the  , 
consumer,  who  can  not  protect  itself  ? In  other  words,  what  we  are  i 
interested  in  is  having  the  stockyards  run  in  the  public  interest,  and  i 
the  question  of  ownership  as  it  seems  to  me  does  not  bear  very  directly  , 
upon  the  determination  of  that  question. 

Mr.  Kincheloe.  Let  me  ask  you  one  more  question. 

Mr.  Anderson.  The  reason,  of  course,  for  the  raising  of  the  ques-  ! 
tion  of  ownership  I think  was  this:  Those  who  raised  that  question  f 
were  mostly  of  opinion  that  the  stockyards  should  be  owned  by  the  j 
railroads,  because  if  owned  by  the  railroads  it  was  thought  they  ) 
would  be  subject  to  the  same  regulation  as  to  rates,  practices,  and  | 
facilities  as  the  railroads  are.  Now,  we  attempt  to  accomplish  all  i 
that  under  this  bill  without  undertaking  to  compel  a change  of  owner- 
ship, the  difficulties  of  which  are  pretty  well  illustrated  by  the  at- 
tempts that  have  been  made  under  the  decree  to  divest  the  packers 
of  ownership  of  stockyards.  I am  assuming  that  there  has  been  an 
honest  effort  on  the  part  of  everybody  to  accomplish  that  end  in  the 
decree  that  requires  it. 

Mr.  Kincheloe.  What  is  your  idea  as  to  what  evil  there  is  in 
having  none  of  the  packers  own  the  refrigerator  cars  ? 

Mr.  Anderson.  Well,  I think  that  raises  substantially  the  same 
question.  I have  never  gone  into  that  question  to  the  same  extent 
I have  some  other  questions  involved,  but  if  the  refrigerator  cars  and 
the  refrigerator  companies  are  common  carriers  and  the  same  rules 
apply  to  them  as  to  nondiscriminatory  rates  and  practices  as  would 
apply  to  other  common  carriers  I do  not  think  the  question  of  owner- 
ship would  apply  to  the  same  extent  that  it  has  been  urged  by  some 
people.  But  there  again  it  seems  to  me  it  is  a question  of  conducting 
the  refrigerator  cars  on  such  a basis  that  every  shipper  shall  have  a 
veasonable  and  fair  use  thereof.  If  refrigerator  companies  are  com- 


MEAT  PACKER. 


23 


mon  carriers  and  must  operate  their  cars  for  the  benefit  of  everybody 
concerned  without  undue  advantage  to  anybody,  the  question  of 
ownership  I do  not  think  a very  material  one. 

Mr.  Kincheloe.  That  is  what  I was  leading  up  to.  Now,  do  they 
have  to  furnish  these  refrigerator  cars  to  independent  packing  con- 
cerns who  do  not  own  refrigerator  cars  ? 

Mr.  Anderson.  Only  by  agreement,  I think. 

Mr.  Kincheloe.  That  is  what  I did  not  know. 

Mr.  Anderson.  There  was  some  amendment  in  the  transportation 
act  which  gave  the  Interstate  Commerce  Commission  some  authority 
over  refrigerator  cars  which  it  did  not  formerly  have.  I must  say, 
however,  that  I am  not  sufficiently  familiar  with  that  provision  to 
discuss  the  limit  of  its  effect.  But  it  was  stated  by  the  commission 
at  the  time  that  the  provision  was  sufficient  to  give  the  Interstate 
Commerce  Commission  the  same  authority  with  respect  to  refrigerator 
cars  as  over  any  other  class  of  special  equipment  cars,  or  any  other 
cars. 

Mr.  Tincher.  It  did  give  the  commission  authority  to  require  the 
common  carrier  to  furnish  refrigerator  cars  in  any  suitable  quantity 
to  those  having  use  therefor. 

Mr.  Anderson.  But  it  did  not  take  away  from  the  packers  or 
anybody  else  the  right  to  operate  their  own  refrigerator  lines  to  the 
exclusion  of  any  other  shipper.  That  is  the  difficulty. 

Mr.  Aswell.  May  I ask  if  one  of  the  provisions  of  your  bill  avoiding 
general  drastic  regulations  would  not  go  far  to  meet  the  propaganda 
and  criticism  of  too  much  Government  in  business  ? 

Mr.  Anderson.  I think  it  does. 

Mr.  Aswell.  That  seems  to  me  a very  important  point. 

Mr.  Anderson.  That  is  one  of  the  things  I had  in  mind  in  adopting 
the  form  of  procedure  we  adopted  in  this  bill. 

Mr.  Aswell.  You  are  not  adding  any  new  regulations  or  new 
control  by  new  rules  of  any  sort  ? 

Mr.  Anderson.  No,  sir. 

Mr.  Tincher.  Does  your  bill,  in  your  judgment,  confer  upon  the 
Federal  Trade  Commission  any  different  jurisdiction  to  what  they 
now  have.  It  has  been  suggested  that  your  bill  in  effect  makes  a 
court  of  the  Federal  Trade  Commission  and  gives  them  a different 
class  of  jurisdiction. 

Mr.  Anderson.  I do  not  think  that  is  true.  Of  course  it  does  give 
them  a wider  jurisdiction,  because,  as  I take  it,  there  is  an  extension 
of  the  Federal  Trade  Commission’s  powers  in  the  additions  that  we 
have  made  to  the  things  that  are  prohibited. 

Mr.  Tincher.  The  packers  themselves  in  the  hearings  here,  through 
their  well-informed  men,  advocated  a continuation  of  the  Federal 
Trade  Commission.  They  complained  of  some  of  the  personnel  of 
the  Federal  Trade  Commission  but  advocated  a continuation  of  the 
body.  To  put  this  power  with  some  other  body,  commission,  or  other 
officer,  that  you  are  seeking  in  your  bill  to  give  to  the  Federal  Trade 
Commission,  would  of  necessity  avoid  duplication,  or  in  the  former 
case  avoid  our  taking  from  the  Federal  Trade  Commission  certain 
powers  that  they  now  have,  wouldn’t  it  ? 

Mr.  Anderson.  I think  so.  Of  course  it  seems  clear  that  the 
packers  should  not  be  subject  to  regulation  by  the  Federal  Trade 
Commission  under  the  unfair  methods  of  competition  prohibition, 


24 


MEAT  PACKER. 


and  also  subject  to  some  other  regulating  authority  under  the  general 
prohibitions  of  this  act,  even  though  there  may  be  some  practices 
included  in  unfair  methods  of  competition  which  would  not  be  in- 
cluded in  this  bill. 

Mr.  Tincher.  The  packers  complained  of  some  of  the  reports  of  the 
Federal  Trade  Commission  as  published  and  of  certain  conclusions  the 
commission  reached  concerning  the  five  big  packers.  If  the  Federal 
Trade  Commission  had  the  responsibility  of  making  an  order  to  stop 
any  unfair  practices,  or  to  stop  this  or  that  practice,  if  their  reports 
were  inclined  to  be  sensational  or  probably  even  unfair  as  charged, 
that  would  have  a tendency  to  stop  such  a thing  and  the  system, 
wouldn’t  it  ? 

Mr.  Anderson.  It  seems  so  to  me.  That  recalls  to  my  mind  this 
thought  which  I wanted  to  present  to  the  committee:  It  is  a matter 
of  common  knowledge  that  there  is  not  the  relationship  of  confidence 
between  the  producer  and  the  packer  and  between  the  packer  and  the 
general  public  which,  in  my  judgment  at  least,  it  is  desirable  to  have. 
And  I do  not  know  of  any  way  to  create  that  condition  of  confidence 
except  to  set  up  an  agency  between  producer  and  packer,  and  be- 
tween packer  and  consumer,  that  will  give  confidence  to  the  pro- 
ducer and  to  the  consumer,  and  tend  to  induce  the  belief  that  some- 
body is  going  to  see  to  it  that  a square  deal  is  given  to  everybody 
concerned.  I think  that  the  setting  up  of  such  an  authority  is  just  as 
much  in  the  interest  of  the  packer  as  in  the  interest  of  anybody  else; 
that  instead  of  the  thousands  of  dollars  and  perhaps  millions  of 
dollars  spent  in  good-will  advertising  in  the  last  few  years  in  an  effort  ■ 
to  create  a feeling  of  confidence  on  the  part  of  the  producer  in  the 
integrity  of  the  stock  markets  and  in  the  integrity  of  the  practices  of 
the  packer,  let  us  have  something  like  this  that  will  not  entail  such 
an  expense  on  the  people.  And  there  is  in  my  judgment  a greater 
lack  of  confidence  and  greater  distrust  to-day  than  there  has  ever  ■ 
been  since  this  question  was  first  agitated. 

I think  it  is  in  the  interest  of  the  people  of  the  country  as  a whole , 
that  some  action  be  taken  by  this  committee  and  by  this  Congress  to 
reduce  the  whole  situation  to  one  of  mutual  confidence  and  assurance 
of  a square  deal.  This  situation  is  not  much  different  from  the  situa- ; 
tion  that  existed  years  ago  when  we  first  began  to  consider  regulation 
of  the  railroads  and  when  the  railroads  and  other  concerns,  which  we 
now  consider  public  utilities,  were  mentioned  as  public  utilities. 
And  while  I am  not  prepared  to  say  that  the  situation  in  the  packing 
industry  is  such  that  the  packing  industry  should  be  considered  a 
public  utility,  I do  undertake  to  say  that  its  potential  industrial 
power  is  so  great  that  we  must  deal  with  it  in  some  sense  of  super- 
vision, such  as  we  have  exercised  in  the  case  of  the  railroads  and  other 
public  utilities. 

Mr.  Voigt.  Your  present  judgment  is  that  the  administration  of 
any  packer  bill  should  be  left  in  the  hands  of  the  Federal  Trade 
Commission  ? 

Mr.  Anderson.  So  far  as  it  relates  to  those  who  are  defined  in  the 
bill  as  packers,  yes.  I think,  as  I stated  at  the  beginning  of  my 
remarks,  that  regulation  of  the  stockyards  and  everybody  in  them 
should  be  under  one  jurisdiction,  but  whether  it  should  be  the  same 
jurisdiction  as  controls  or  regulates  the  packers,  I am  not  prepared 
to  say.  I have  no  definitely  formed  opinion  about  that. 


MEAT  PACKER. 


25 


Mr.  Tincher.  The  general  opinion  of  all  the  witnesses  we  have 
heard  on  the  subject  is  that  they  bear  a more  direct  relation  to 
transportation. 

Mr.  Anderson.  The  questions  that  arise  there  are  more  nearly 
identical  with  questions  that  arise  in  transportation  than  any  others 
I know  of.  They  are  questions  as  to  furnishing  facilities  and  the 
rates  and  charges  which  are  charged  for  furnishing  such  facilities  and 
services. 

Mr.  Tincher.  You  are  absolutely  right,  I think,  in  your  statement 
as  to  a condition  of  lack  of  confidence,  and  perhaps  there  never  was 
more  occasion  for  that  feeling  toward  the  industry  than  right  now, 
a time  when  the  producer  is  selling  his  product  way  below  the  cost 
of  production,  and  where  the  ultimate  consumer  is  paying  a price 
that  bears  no  relation  to  that  which  is  paid  to  the  producer. 

Mr.  Anderson.  I suspect  the  packer  is  having  his  troubles  now, 
too. 

Mr.  Tincher.  That  is  what  I was  going  to  ask.  The  packer,  no 
doubt,  has  a serious  situation  confronting  him  right  now.  But,  Mr. 
Anderson,  does  your  bill  reach  the  real  evil  of  this  situation?  Do 
you  think  that  under  the  bill  you  have  before  the  committee  the 
Federal  Trade  Commission  or  anyone  else  would  be  able  to  see  to  it 
that  the  packer  does  properly  value  his  product  to  the  consumer, 
and  see  to  it  that  the  consumer  gets  that  product  at  a legitimate 
profit  only,  above  cost  of  production  ? 

Mr.  Anderson.  I think  so,  at  least  as  far  as  any  governmental 
agency  can  accomplish  that  result. 

Mr.  Tincher.  You  know,  I have  always  had,  what  some  might 
term  a fool  idea  about  this  packer  proposition,  and  that  is  that 
instead  of  enacting  a law  to  prevent  the  packer  from  retailing  his 
meat,  that  we  ought  to  enact  a law  to  force  him  to  see  that  the  con- 
sumer gets  the  meat  without  paying  three  or  four  times  what  the 
packer  even  sold  it  for. 

Mr.  As  well.  You  ask,  Mr.  Tincher,  will  this  bill  reach  the  evil  ? 
What  is  the  evil  ? 

Mr.  Tincher.  The  evil  is  that  perhaps  I sell  an  animal  at  6 cents 
a pound,  and  then  if  I buy  a beef  steak  in  Washington  I pay  45  or 
50  cents  a pound  for  it. 

Mr.  Aswell.  That  is  the  evil  ? 

Mr.  Tincher.  That  is  the  evil.  Is  there  anything  unfair  about 
that?  I understand  the  way  the  thing  is  being  handled  now  that 
even  the  packer  is  losing  money,  but  I do  not  know  where  the  money 
is  going  if  he  is  losing  money. 

Mr.  Jones.  I understand  the  retailer  is  overcharging  for  meats 
frequently.  The  packers  are  publishing  their  cost  prices  to  the 
retailer,  and  now  where  is  the  trouble  ? 

Mr.  Aswell.  Does  this  bill  reach  the  retailer  ? 

Mr.  Jones.  Mr.  Tincher  was  just  suggesting  that  we  ought  to 
require  the  packer  to  sell  to  the  retainer  at  a limited  price. 

Mr.  Tincher.  I think  the  Federal  Trade  Commission  under  this 
bill  would  have  some  jurisdiction  as  to  unfair  practices  all  down 
through  the  line.  Mr.  Anderson’s  idea  is  that  it  is  ithe  product  he 
has  in  mind. 

Mr.  Anderson.  I want  to  make  it  perfectly  clear  that  this  is  not 
a price-fixing  bill.  I am  personally  opposed  to  any  governmental 


26 


MEAT  PACKER. 


agency  fixing  prices.  It  has  been  tried  for  a time  dating  back  4,000 
years  before  Christ  by  nearly  every  people  on  the  face  of  the  globe 
and  it  has  not  worked  out. 

Mr.  Jones.  Would  that  be  a price-fixing  bill?  First,  suppose  the 
bill  should  require  of  the  packer  to  see  to  it  that  the  retailer  sells  at 
a profit  not  more  than  a third  or  a half  of  25  per  cent,  or  any  per- 
centage that  might  be  agreed  upon,  would  that  be  fixing  the  price, 
to  say:  We  will  not  sell  to  you  unless  you  will  agree  to  this  ? 

Mr.  Anderson.  I think  eventually  it  would  be. 

Mr.  Purnell.  Has  the  Congress  power  to  pass  any  legislation 
such  as  that? 

Mr.  Jones.  I am  asking  for  information. 

Mr.  Anderson.  We  have  passed  a lot  of  legislation  to  prohibit 
such  things. 

Mr.  Jones.  We  have  also  passed  legislation  to  prohibit  profiteering, 
in  a sense.  That  was  the  effect  of  it  during  the  war. 

Mr.  Anderson.  I think  the  way  to  regulate  prices  is  to  create  in 
the  industry,  as  far  as  it  is  possible  to  do  it,  healthy  conditions  of 
competition.  The  trouble  with  us  heretofore  has  been  that  we  have 
dealt  with  the  fact  after  it  has  become  an  accomplished  fact.  We 
have  not  undertaken  to  deal  with  a monopoly  until  after  a thing  has 
become  a monopoly,  and  then  we  have  sought  to  divide  it  into  its 
constituent  parts  and  compel  those  parts  to  compete  all  over  again.  ; 
I think  that  has  been  a failure  in  each  and  every  instance.  What 
this  bill  seeks  to  do  is  to  prohibit  the  particular  conditions  under 
which  monopoly  is  built  up,  and  to  prevent  a monopoly  in  the  first  i 
place  and  to  induce  healthy  competition. 

Mr.  Jones.  Did  the  Senate  consider  a bill  during  the  last  session 
along  the  line  of  the  bill  you  have  here  ? 

Mr.  Anderson.  The  bill  had  been  introduced  about  the  time  the  ; 
Senate  was  considering  the  subject,  but  I do  not  think  that  the  Senate  • 
considered  it. 

Mr.  Jones.  They  actually  passed  a bill  somewhat  similar  to  the  j 
other  one  ? 

Mr.  Anderson.  They  passed  what  was  called  the  Gronna  bill. 

Mr.  Jones.  And  it  came  over  to  the  House  for  action? 

Mr.  Anderson.  Yes. 

Mr.  Jones.  That  is  quite  similar  in  some  respects  to  your  bill  ? 

Mr.  Anderson.  It  is  dissimilar  in  many  respects. 

Mr.  Jones.  The  reason  I was  asking  that  question  is  to  know  the 
situation,  as  to  whether  they  gave  serious  consideration  to  your  bill. 

I wanted  to  get  an  idea  as  to  whether  there  might  be  a tie-up  between 
Senate  and  House  in  the  view  of  what  should  be  done  in  the  way  of 
legislation.  If  they  have  passed  and  favor  a particular  bill,  and  it 
is  quite  dissimilar  from  yours,  as  a practical  proposition  wouldn’t 
it  be  hard  to  get  your  bill  through  ? 

Mr.  Anderson.  My  observation  is  that  the  Senate  usually  yields 
when  the  House  is  right. 

Mr.  McLaughlin  of  Nebraska.  You  expressed  yourself  in  criticism 
of  the  provision  in  the  Senate  bill  creating  a Federal  live-stock  com- 
mission in  that  it  empowered  such  a commission  to  make  rules, 
regulations,  orders,  etc.  I presume  you  referred  principally  to  section 
10,  on  page  9,  where  it  reads: 


MEAT  PACKER.  27 

The  commission  may  make  such  rules,  regulations,  and  orders  as  will  be  necessary 
to  carry  out  the  provisions  of  this  act. 

Of  course  that  provision  is  nearly  always  used  in  such  measures. 
It  would  seem  to  me  from  the  very  reading  of  the  provision  that  the 
rules,  regulations,  and  orders  are  in  no  way  of  a legislative  character, 
hut  that  they  are  similar  to  such  rules,  regulations,  and  orders  as 
may  be  necessary  by  the  commission  to  carry  out  the  provisions  of 
the  act. 

I would  like  to  ask  you  in  that  conn  ection  if  it  should  transpire  that 
a separate  commission  should  be  appointed,  and  if  this  provision 
should  remain  in  the  law,  would  the  new  commission,  having  the 
power  to  make  rules,  regulations,  and  orders  necessary  to  carry  out 
the  provisions  of  the  act,  have  any  wider  authority  or  any  greater 
scope  of  power  than  the  Federal  Trade  Commission  would  have  under 
the  act  suggested  by  your  bill,  in  case  the  enforcement  or  supervision 
of  the  law  were  placed  in  the  hands  of  the  Federal  Trade  Commis- 
sion ? 

Mr.  Anderson.  Not  if  they  put  the  construction  on  it  that  you  do. 
But  the  construction  that  they  might  put  upon  it  possibly  or  even 
probably  might  be  a different  one.  If  they  considered  that  law  as 
granting  them  power  to  enforce  the  general  prohibition  of  section  12 
of  the  Senate  bill,  they  might  start  out  to  say  right  off  the  bat,  with- 
out any  hearing  whatever,  such  and  such  a thing  is  prohibited  by  the 
provisions  of  this  act,  and  immediately  issue  general  regulations  pro- 
hibiting everybody  in  the  industry  from  doing  that  particular  thing. 

Mr.  McLaughlin  of  Nebraska.  Of  course  that  would  all  be  subject 
to  review  by  the  courts. 

Mr.  Anderson.  Well,  I do  not  know  whether  it  would  or  not. 

Mr.  McLaughlin  of  Nebraska.  Oh,  certainly  it  would. 

Mr.  Anderson.  I presume  that  a packer  might  get  out  an  injunc- 
tion restraining  the  enforcement  of  such  an  order,  and  eventually  get 
a review  of  the  validity  of  the  order. 

Mr.  McLaughlin  of  Nebraska.  Certainly,  he  could  do  that  without 
any  trouble  when  the  bill  provides  that  they  may  make  such  rules, 
regulations,  and  orders  as  may  be  necessary  to  carry  out  the  provi- 
sions of  this  act. 

Mr.  Anderson.  I believe  the  least  that  can  be  done,  the  least 
that  ought  to  be  done  in  the  case  of  power  to  issue  general  regulations, 
if  you  are  going  to  give  any  such  power,  is  to  provide  that  such  rules, 
regulations,  and  orders  shall  not  be  issued  without  a hearing  and 
without  consideration  of  the  questions  involved,  in  which  considera- 
tion those  to  be  regulated  shall  have  the  right  to  be  heard  before  the 
regulation  is  issued  and  becomes  effective. 

Mr.  McLaughlin  of  Nebraska.  Under  your  bill  would  the  Federal 
Trade  Commission  have  the  power  to  issue  such  rules,  regulations, 
and  orders  as  may  be  necessary  to  carry  out  the  provisions  of  the  law  ? 

Mr.  Anderson.  Only  for  the  purposes  of  procedure.  It  would  not 
have  the  power  to  make  general  regulations. 

Mr.  Purnell.  I only  want  to  ask  one  question  there:  You  have 
given  this  matter  considerable  study.  Are  you  convinced  that  we 
can  carry  out  the  purpose  sought  to  be  gained  by  this  bill  without 
the  creation  of  any  new  board  or  commission  ? 

Mr.  Anderson.  I should  think  that  entirely  feasible. 


28 


MEAT  PACKER. 


Mr.  As  well.  Your  statement  is  very  illuminating  and  helpful  to 
me.  But  you  have  made  one  statement,  at  least  by  inference,  that 
causes  great  confusion  in  my  mind  and  some  discouragement.  You 
intimate  that  this  proposed  legislation  is  similar  to  that  regulating- 
the  railroads. 

Mr.  Anderson.  As  to  the  stockyards  only. 

Mr.  Aswell.  All  right.  Now,  a few  days  ago  I saw  about  200 
Congressmen,  many  of  whom  had  voted  for  the  railroad  bill,  up  at 
the  White  House  with  the  farmers  of  the  country,  begging  the 
President  to  let  them  change  and  retract  in  the  matter  of  the  act 
that  was  passed. 

Mr.  Anderson.  That  is  true,  but  you  must  remember  that 

Mr.  Aswell  (continuing).  Are  you  in  favor  of  anything  of  that 
kind  in  this  bill  ? 

Mr.  Anderson.  The  question  with  that  bill  was  that  the  Con- 
gress did  give  to  the  Interstate  Commerce  Commission  authority  to 
do  a certain  thing,  namely,  to  make  rates  upon  the  basis  that  they 
would  return  5 per  cent  upon  the  aggregate  value  of  railroad  prop- 
erty. The  Interstate  Commerce  Commission  in  construing  that  pro- 
vision came  to  the  conclusion  that  it  required  an  increase  in  freight  1 
rates.  What  action  the  commission  would  have  taken  if  we  had 
left  them  entirely  free  to  solve  the  problem  without  any  legislative 
directions  is  another  question. 

Mr.  Aswell.  You  do  not  fear  any  such  result  in  this  case? 

Mr.  Anderson.  No,  because  I do  not  think  there  is  any  similar  » 
provision  in  this  proposed  legislation,  any  provision  which  would 
tie  the  hands  of  the  Federal  Trade  Commission  in  dealing  with  the 
question  in  a sensible  and  informal  way. 

Mr.  Tincher.  Of  course  the  Interstate  Commerce  Commission’s 
hands  were  tied  again  in  another  way,  which  probably  ought  to  be 
corrected — letting  another  commission  fix  the  expenses  which  the 
railroads  may  be  put  to  in  the  way  of  fixed  charges. 

Mr.  Anderson.  Of  course  the  gentleman  from  Kansas  [Mr.  £ 
Tincher]  is  right  about  that.  Unless  there  are  further  questions  by 
some  member  of  the  committee,  I want  to  thank  the  committee  for  } 
its  patient  consideration. 

Mr.  Tincher.  Mr.  Anderson,  I have  been  requested  to  ask  you 
a question  about  your  bill.  To  what  extent  would  your  bill  apply 
to  the  commission  man  or  speculator  on  the  market,  and  to  what 
extent  do  you  think  that  necessary  ? 

Mr.  Anderson.  It  would  extend  to  a regulation  of  the  services 
which  he  renders,  the  price  which  he  charges  for  his  services,  and 
the  practices  which  he  engages  in  on  the  stockyards. 

Mr.  Tincher.  And  he  would  be  under  the  Interstate  Commerce 
Commission  ? 

Mr.  Anderson.  I would  suppose  so.  And  if  I were  a member  of 
the  Interstate  Commerce  Commission,  charged  with  the  adminis- 
tration of  this  act,  I would  set  up  an  agency  in  each  stockyards,, 
right  in  the  stockyards  themselves,  to  deal  with  the  proposition  in  a 
local  and  intimate  way,  on  the  same  basis  substantially  as  it  is  dealt 
with  under  the  provisions  of  the  Minnesota  statute.  I certainly 
would  not  want  to  see  an  attempt  made  to  regulate  the  stockyards* 
from  Washington.  I think  that  would  be  a mistake  and  would 
destroy  the  effectiveness  of  the  entire  system  of  regulation.  My 


MEAT  PACKER. 


20 


idea  is  that  there  should  be  an  agency  set  up  in  the  stockyards  them- 
selves to  deal  directly  with  the  producer  and  commission  man  and  the 
buyer  and  the  trader  in  a direct  and  more  or  less  informal  way.  The 
less  procedure  you  have  as  to  matters  upon  which  you  can  come  to 
an  agreement  with  various  parties  the  better  you  are  off  in  my 
judgment.  The  most  of  these  matters  are  matters  of  adjustment 
between  the  various  parties  concerned. 

Mr.  Tincher.  Mr.  Anderson,  getting  back  to  the  proposition  I 
mentioned  to  you  a while  ago:  As  I understand  it  here  in  the  city 
of  Washington,  and  I have  visited  the  market,  the  wholesalers,  that 
is  the  packers,  have  their  offices,  we  will  say  facing  the  east  as  I do 
not  remember  which  direction,  and  you  walk  right  through  the  build- 
ing to  the  retail  offices  facing  the  west.  The  retailer  walks  in  to  the 
wholesaler  and  buys  meat  and  takes  it  over  there  and  retails  it.  If 
the  condition  exists  to-day  that  existed  one  morning  when  I was 
down  at  the  market  it  is  a bad  situation,  for  then  the  wholesalers 
were  selling  liver  at  14  cents  a pound  and  the  retailer  was  walking 
across  the  place  and  retailing  it  at  42  cents  a pound. 

If  that  is  partially  accountable  for  the  unrest  and  lack  of  confidence, 
and  that  is  one  real  evil  in  the  business,  under  your  bill  where  a 
Government  agency  has  the  power  to  prevent  unfair  practices,  if  that 
agency  should  conclude  that  the  packer  should  not  discriminate  as 
to  the  people  to  whom  he  sells  his  product,  it  would  not  take  long 
to  reduce  the  retail  market  on  those  products  in  the  city,  would  it  ? 

Mr.  Anderson.  If  the  commission  came  to  that  conclusion  and 
made  an  order  which  became  final,  no. 

Mr.  Tincher.  Those  of  us  who  are  in  favor  of  regulation  have  been 
somewhat  at  right  angles  on  this  proposition. 

Mr.  Aswell.  How  would  you  have  any  wholesalers  if  everybody 
could  buy  at  retail? 

Mr.  Tincher.  I understand  that,  but  if  there  is  such  a spread,  and 
it  is  of  such  a public  character  that  it  requires  regulation,  which  I 
think  is  the  case,  there  might  be  such  regulation  as  would  help  a 
great  deal. 

Mr.  Aswell.  Certainly. 

Mr.  Tincher.  For  instance,  if  a man  could  buy  that  liver  at  22 
cents  a pound  instead  of  42  cents  a pound,  at  which  price  it  was  selling 
the  day  I was  there,  and  there  was  nothing  but  a legitimate  trans- 
action carried  on  there,  producers  and  consumers  would  both  profit 
and  it  wmuld  not  hurt  the  legitimate  man  at  all  in  the  handling  of  it. 

And  in  this  connection  there  was  an  action  brought  as  I understand 
it  by  the  Attorney  General  some  time  ago  to  prevent  the  packer  from 
doing  the  very  thing  I have  really  advocated  he  ought  to  do,  and  that 
was  the  situation  I have  described.  That  is  to  say,  that  the  producer 
shall  get  his  product  to  the  market  with  only  a fair  profit  added. 

Mr.  Anderson.  Well,  of  course  before  there  could  be  any  action 
before  any  regulatory  authority  there  would  have  to  be  a course  of 
conduct  which  was  contrary  to  some  provision  of  this  act.  The 
commission  or  regulatory  authority  would  not  have  any  power  to 
make  something  unlawful  which  was  not  made  unlawful  under  the 
general  prohibitions.  If  those  prohibitions  did  not  cover  things  that 
ought  to  be  prohibited  in  general  terms,  then  the  only  way  to  reach 
such  a proposition  would  be  to  extend  the  prohibitions  sufficiently 
to  reach  them. 


30 


MEAT  PACKER. 


Mr.  Tincher.  Do  }H)ur  prohibitions  prevent  discrimination 

Mr.  Anderson.  What  constitutes  discrimination  is  always  a. 
question  of  fact  to  be  determined  by  all  the  conditions  surrounding 
the  transaction. 

Mr.  Purnell.  If  the  fault  lies  wholly  with  the  retail  man  we 
better  reach  him  directly  and  not  force  the  packers  to  do  it  for  us. 

Mr.  Tincher.  I think  Mr.  Anderson  answers  that  question  in  the 
statement  which  he  has  made  here.  When  he  said  we  had  to  have 
this  regulation  brought  down  to  the  product,  I think  he  reached  it. 

I do  not  think  we  can  pass  a law  saying  to  the  retail  man:  You  shall 
do  so  and  so.  But  we  can  pass  a law  authorizing  someone  to  regu- 
late the  handling  of  the  product;  and  if  we  do  that  I think  it  will 
have  a tendency  to  cure  some  of  the  evils  from  which  the  people 
suffer. 

Mr.  Voigt.  There  is  the  act  of  1920  giving  some  additional  power 
to  the  Interstate  Commerce  Commission,  in  connection  with  re- 
frigerator cars.  Doubtless  this  committee  will  want  to  know  some- 
thing about  what  that  is.  If  you  do  not  mind,  Mr.  Anderson,  I 
would  like  to  have  that  printed  in  connection  with  your  statement. 
There  are  three  paragraphs  of  section  1 in  the  interstate  commerce  j 
act  which  will  give  the  committee  some  information  on  that  subject. 

Mr.  Anderson.  I will  be  very  glad  to  have  that  go  in  here. 

The  Chairman.  Without  objection  it  will  be  inserted. 

Mr.  Voigt.  It  is  as  follows: 

(3)  The  term  ‘‘common  carrier”  as  used  in  this  act  shall  include  all  pipe-line  com-  « 
panies;  telegraph,  telephone,  and  cable  companies  operating  by  wire  or  wireless;  ? 
express  companies;  sleeping-car  companies;  and  all  persons,  natural  or  artificial,  i 
engaged  in  such  transportation  or  transmission  as  aforesaid  as  common  carriers  for 
hire.  Wherever  the  word  “carrier  ” is  used  in  this  act  it  shall  be  held  to  mean  “com- 
mon carrier.”  The  term  “railroad”  as  used  in  this  act  shall  include  all  bridges,  car  j 
floats,  lighters,  and  ferries  used  by  or  operated  in  connection  with  any  railroad,  and  ; 
also  all  the  road  in  use  by  any  common  carrier  operating  a railroad,  whether  owned  or  ‘ 
operated  under  a contract,  agreement,  or  lease,  and  also  all  switches,  spurs,  tracks,  j 
terminals,  and  terminal  facilities  of  every  kind  used  or  necessary  in  the  transportation  i 
of  the  persons  or  property  designated  herein,  including  all  freight  depots,  yards,  and  j 
grounds,  used  or  necessary  in  the  transportation  or  delivery  of  any  such  property.  | 
The  term  “transportation”  as  used  in  this  act  shall  include  locomotives,  cars,  and  | 
other  vehicles,  vessels,  and  all  instrumentalities  and  facilities  of  shipment  or  carriage,  s 
irrespective  of  ownership  or  of  any  contract,  express  or  implied,  for  the  use  thereof, 
and  all  services  in  connection  with  the  receipt,  delivery,  elevation,  and  transfer  in 
transit,  ventilation,  refrigeration  or  icing,  storage,  and  handling  of  property  trans- 
ported. The  term  “transmission”  as  used  in  this  act  shall  include  the  transmission 
of  intelligence  through  the  application  of  electrical  energy  or  other  use  of  electricity,  j 
whether  by  means  of  wire,  cable,  radio  apparatus,  or  other  wire  or  wireless  conductors  3 
or  applicances,  and  all  instrumentalities  and  facilities  for  and  services  in  connection  ] 
with  the  receipt,  forwarding,  and  delivery  of  messages,  communications,  or  other  ;i 
intelligence  so  transmitted,  hereinafter  also  collectively  called  messages. 

******* 

(10)  The  term  “car  service”  in  this  act  shall  include  the  use,  control,  supply,.  | 
movement,  distribution,  exchange,  interchange,  and  return  of  locomotives,  cars, 
and  other  vehicles  used  in  the  transportation  of  property,  including  special  types  of  j 
equipment,  and  the  supply  of  trains,  by  any  carrier  by  railroad  subject  to  this  act. 
******* 

(21)  The  commission  may,  after  hearing,  in  a proceeding  upon  complaint  or  upon 
its  own  initiative  without  complaint,  authorize  or  require  by  order  any  carriers  by  \ 
railroad  subject  to  this  act,  party  to  such  proceeding,  to  provide  itself  with  safe  and 
adequate  facilities  for  performing  as  a common  carrier  its  car  service  as  that  term 
is  used  in  this  act,  and  to  extend  its  line  or  lines:  Provided , That  no  such  authoriza- 
tion or  order  shall  be  made  unless  the  commission  finds,  as  to  such  extension,  that  it 
is  reasonably  required  in  the  interest  of  public  convenience  and  necessity,  or  as  to  1 


MEAT  PACKER. 


31 


such  extension  or  facilities  that  the  expense  involved  therein  will  not  impair  the  ability 
of  the  carrier  to  perform  its  duty  to  the  public.  Any  carrier  subject  to  this  act  which 
refuses  or  neglects  to  comply  with  any  order  of  the  commission  made  in  pursuance  of 
this  paragraph  shall  be  liable  to  a penalty  of  $100  for  each  day  during  which  such 
refusal  or  neglect  continues,  which  shall  accrue  to  the  United  States  and  may  be 
recovered  in  a civil  action  brought  by  the  United  States. 

Mr.  Anderson.  If  there  are  no  other  questions  I want  to  say  that 
I am  very  much  obliged  to  the  committee  for  its  very  patient  con- 
sideration. 

The  Chairman.  The  committee  is  very  much  obliged  to  you,  Mr. 
Anderson,  for  the  information  you  have  given  us.  We  will  now  hear 
Mr.  Wells,  of  St.  Paul. 

STATEMENT  OF  MR.  R.  J.  WELLS,  SUPERVISOR  OF  THE 
STATE  PUBLIC  STOCKYARDS,  SOUTH  ST.  PAUL,  MINN. 

Mr.  Wells.  Mr.  Chairman  and  gentlemen  of  the  committee,  as 
Representative  Anderson  has  said,  and  as  Mr.  Sullivan  has  said,  I 
speak  from  a different  angle  than  perhaps  other  gentlemen  that  will 
appear  here.  I have  no  authority  to  speak  for  or  against  the  general 
provisions  of  this  bill.  I have  my  own  personal  opinion,  of  course,  but 
no  authority  to  tell  you  what  the  people  of  Minnesota  think  about 
same.  But  I do  know  what  they  think  in  regard  to  the  stockyard 
proposition. 

The  Chairman.  The  committee  will  be  very  glad  to  have  you  fell 
them  about  that. 

Mr.  Wells.  I know  that  the  stock  growers  of  Minnesota  have  for 
many  years  been  endeavoring  to  work  out  some  way  whereby  they 
could  solve  their  marketing  problem  to  better  advantage.  They 
appealed  to  the  State  legislature  at  different  times  to  pass  laws 
relating  to  regulation  of  stockyards  at  South  St.  Paul.  The  legisla- 
ture took  action. 

The  first  act  was  an  act  requiring  feed  troughs  to  be  placed  in  pens. 
Formerly  hogs  were  fed  by  throwing  corn  on  the  floor  of  the  pen. 
The  corn  thereby  became  filthy  and,  of  course,  the  hogs  did  not  get 
the  full  benefit  of  it,  and  after  they  were  driven  out  the  corn  was 
carefully  washed  up  and  resold  after  being  dried.  We  have  stopped 
that  evil  by  having  hog  troughs  put  in  pens  and  requiring  that  corn 
shall  be  put  into  the  troughs.  We  find  that  the  hogs  get  a better 
fill  and  there  is  not  so  much  corn  to  be  resold. 

In  regard  to  supervision,  the  law  says  that  the  railroad  and  ware- 
house commission  shall  have  authority.  They  have  the  power  to 
license  all  dealers  and  speculators.  They  have  the  power  to  fix 
commission  charges,  to  fix  feed  prices  in  the  yards,  corn,  hay,  and 
bedding.  And  they  have  general  supervision  in  a sanitary  way. 

We  have  gone  on  under  those  laws  and  carried  them  into  effect  as 
far  as  we  possibly  could.  The  supervisor’s  office  is  maintained  in  the 
Exchange  Building.  We  employ  at  the  present  time  about  32  people 
who  are  looking  after  the  yard  proper.  We  do  all  the  weighing  of 
live  stock.  We  have  18  scales.  We  have  to  keep  about  19  to  20 
weighers  in  order  to  take  care  of  the  18  scales  in  case  a weigher  is  sick 
or  otherwise  absent.  Then  we  have  four  hog  shrinkers  as  a buffer 
between  packers  and  shippers. 

Perhaps  you  do  not  know  what  a hog  shrinker  is.  I will  tell  you 
briefly.  Under  the  rules  there  is  a shrinkage  allowed  for  certain 


32 


MEAT  PACKER. 


classes  of  hogs,  70  pounds  in  the  case  of  one  class  of  animals  and  30 
pounds  in  the  case  of  another  class.  The  packer  naturally  wants  to 
get  all  the  shrinkage  he  can  on  his  animals.  The  shippers  quite 
naturally  want  to  protect  themselves.  The  shippers  found  it  neces- 
sary to  put  in  their  own  hog  shrinkers  or  inspectors  to  protect  them- 
selves from  the  packer  buyers.  We  keep  four  of  them  in  the  pens  all 
day  long.  They  are  having  a very,  very  good  success  in  the  work, 
and  we  are  having  no  complaints  whatever  from  either  the  packers 
or  the  shippers  on  that  score. 

The  Chairman.  What  is  the  shrinkage  ? 

Mr.  Wells.  Seventy  pounds  in  the  case  of  stags  and  30  pounds 
in  the  case  of  pigging  sows. 

The  Chairman.  What  was  the  shrinkage  before  ? 

Mr.  Wells.  It  remains  the  same.  It  was  a little  higher  four  years 
ago.  but  was  reduced  by  the  action  of  the  packers  themselves. 

The  Chairman.  It  used  to  be  80  pounds  and  40  pounds  ? 

Mr.  Wells.  Yes,  sir. 

Mr.  Tincher.  The  quarrel  on  that  subject  was  not  so  much  over 
the  amount  as  over  the  classification,  was  it  ? 

Mr.  Wells.  No.  It  depends  upon  the  classification  of  the  hogs. 

As  I have  stated,  the  supervisor’s  office  is  there  in  the  Exchange  ; 
Building  and  his  office  is  open  during  market  hours.  If  a shipper  has 
any  complaint  whatever  to  make,  he  gets  in  touch  immediately  with  j 
the  supervisor.  In  the  office  are  clerks  who  are  familiar  with  the 
entire  workings  of  the  yard,  and  immediately  when  a complaint  is  t 
made  they  take  it  up  and  trace  the  complaint  down  and  find  out  the  i 
actual  facts,  so  that  the  shipper  goes  home  the  same  day  after  his  • 
complaint  has  been  adjusted. 

I want  to  say  something  to  you  about  sanitary  conditions.  When 
we  went  there  the  yards  were  in  bad  shape  as  far  as  sanitary  con- 
ditions were  concerned.  We  have  installed  a number  of  service  sta-  ■ 
tions,  or  the  stockyards  have  under  the  orders  of  the  commission, 
to  provide  for  the  welfare  of  the  men  and  people  doing  business  in  J 
the  yards. 

We  have  had  the  scale  houses  revamped  so  that  the  weigher  can  } 
see  the  whole  instrument  at  all  times.  We  have  had  speaking  tubes  * 
put  in  the  houses  and  general  improvements  installed  all  over  the 
yards. 

As  I have  already  explained,  we  have  four  inspectors  constantly 
in  the  yards,  patrolling  the  yards  from  morning  till  night.  It  is 
their  duty  to  see  that  none  of  the  rules  and  regulations  of  the  com- 
mission are  violated.  Furthermore,  they  are  to  see  that  all  the  hay 
and  grain  is  actually  weighed  out  to  the  shipper  or  to  the  commission 
man  and  then  to  the  shipper.  It  is  their  duty  to  see  in  the  winter- 
time that  the  pens  are  not  being  overflowed  with  water  from . the 
watering  troughs.  You  know  that  men  are  in  the  habit  of  going 
along  and  turning  the  water  on  for  the  stock  and  then  driving  the 
stock  out,  and  the  result  often  is,  or  was,  I mean,  that  there  is  a 
frozen  mass  on  the  floors  of  the  pens. 

Two  men  are  stationed  at  the  unloading  pens  at  all  times  to  see  that 
stock  are  not  improperly  treated.  You  know  the  average  stockyard 
man  does  not  care  very  much  about  exercising  the  proper  care  in  the 
treatment  of  cattle.  For  instance,  if  a calf  runs  back  into  the  car  he 
is  apt  to  hit  him  over  the  head  or  bod}q  which  injures  the  animal,  and 


MEAT  PACKER. 


33 


also  frequently  injures  the  meat.  They  are  there  to  protect  that 
situation. 

Further,  as  to  the  weighing  department,  we  have  18  scales,  and  we 
have  18  scale  men  from  the  scale  department  of  the  State  of  Minne- 
sota stationed  in  the  yard  at  all  times.  If  those  scales,  or  any  one  of 
them,  is  out  of  balance  4 ounces  to  1,000  pounds,  or  a pound  in  4,000 
pounds,  the  weighing  thereon  is  immediately  stopped. 

We  had  occasion  to  condemn  one  scale  entirely  and  tear  it  out. 
And  we  have  practically  found  it  necessary  to  reset  every  scale  in  the 
yard.  A scale  may  be  weighing  correctly  at  5,000  pounds,  but  if  you 
move  it  an  inch  or  so  it  may  be  wrong.  All  the  scales  when  we  went 
there  had  a 10-pound  break  on  them.  If  you  drive  on  a lamb  that 
weighs  50  pounds  or  60  pounds,  it  means  you  are  guessing  at  its 
weight.  So  we  had  them  install  dinky  scales,  weighing  down  to  actual 
pounds  on  which  to  weigh  these  small  animals. 

For  every  draft  of  animals  that  is  taken  over  the  scales  there  is  a 
scale  ticket  issued  in  triplicate,  one  of  which  goes  to  the  buyer,  one 
to  the  seller,  and  the  original  is  retained  in  our  office  as  a record. 

In  the  year  1920  we  weighed  over  the  scales  4,000,271  head  of 
stock,  678,000  drafts,  without  a complaint  ever  coming  to  the  office 
of  an  error  in  weight.  Every  weigher  is  bonded  to  the  State  of 
Minnesota  in  the  sum  of  $5,000,  and  under  our  rules  and  regulations 
he  is  held  personally  liable  for  any  mistakes  he  may  make.  That  is, 
the  bonding  company  is  held  liable  for  any  mistake,  and  then  the 
bonding  company  holds  him  if  it  can. 

The  commission  has  taken  a valuation  of  the  yards.  They  are  just 
about  completing  that  work  now.  The  commission  were  working  on 
the  valuation  of  the  real  property  when  I left  home  a week  ago,  and 
I think  they  are  about  through  with  that.  When  that  work  is 
through  we  will  have  a complete  valuation  of  the  yards. 

On  the  valuation  as  far  as  it  had  progressed  on  the  1st  day  of 
July,  1920,  the  commission  issued  its  formal  order  fixing  the  prices 
of  hay,  grain,  and  bedding  at  the  yards.  The  Lever  Act  being  in 
effect  the  stockyards  company  claimed  they  were  under  the  Govern- 
ment, and  their  contention  is  pending  in  the  courts  now.  Of  course, 
since  the  3d  of  March  that  question  does  not  apply.  But  I expect  a 
decision  will  be  handed  down  by  the  Supreme  Court  any  day  now,  as 
it  had  been  argued  and  submitted  by  the  parties  about  a month  ago. 

In  regard  to  the  delivery  of  hay  and  grain  to  yards,  when  we  went 
there  we  found  all  hay  was  sent  out  and  put  in  the  pens  at  100  pounds 
to  the  bale.  As  to  actual  weight  a bale  would  average  along  about 
72  or  73  pounds.  We  require  that  hay  shall  go  in  the  pens  charged 
at  the  actual  amount  when  weighed  over  the  scales.  Then  we  require 
every  commission  man  to  render  to  our  office  a report,  on  the  1st  day 
pf  each  month,  showing  how  much  hay,  grain,  and  bedding  he  has 
charged  his  clients  with — his  shippers.  Then  we  require  the  stock- 
yards company  to  furnish  us  the  amount  of  hay,  grain,  and  bedding 
they  have  sold  to  those  men.  So  that  thereby  we  have  a check  on 
the  situation.  If  we  find  any  great  discrepancy,  if  it  amounts  to 
7ery  much,  we  immediately  go  and  check  back  with  the  scales  and 
with  the  commission  firms. 

Representative  Anderson  has  told  you  about  the  liability  of  the 
50uth  St.  Paul  yards.  We  assist  in  every  way  possible,  the  stock- 
46985—21 3 


34 


MEAT  PACKER. 


yards  company,  to  fix  liability  in  case  of  loss  of  hogs  and  cattle. 
Sometimes  we  find  it  is  with  the  railroad  company  and  sometimes 
with  the  stockyards  company.  They  may  unload  cattle  or  hogs  at 
a feeding  station  out  in  the  country,  at  night  or  something  of  that 
kind,  and  in  reloading  may  miss  some  of  the  animals  or  some  may 
escape.  The  stockyards  company,  of  course,  is  not  liable  for  such 
animals.  We  take  chute  counts  of  those  animals  coming  into  the 
yards,  and  if  we  find  the  chute  count  does  not  agree  with  the  shipper’s 
count  we  follow  those  animals  down  through  the  yard  and  over  the 
scales,  and  if  it  is  the  fault  of  the  railroad  company  a claim  is  filed 
therefor. 

Mr.  Chairman  and  gentlemen  of  the  committee,  I am  going  to  cut 
my  remarks,  because  I want  Mr.  Sullivan  to  be  given  a few  minutes 
of  my  time,  if  you  will  permit  that.  Representative  Anderson  has 
prepared  an  amendment,  which  reads  as  follows: 

Sec.  405.  The  provisions  of  Title  III  shall  not  apply  to  any  stockyard  owner  or 
market  agency  furnishing  stockyard  services  at  a stockyard  in  a State  which  has  or 
may  hereafter  establish  an  agency  authorized  and  empowered  to  regulate  stockyard 
services  or  the  rates  or  charges  made  therefor  or  the  regulations  and  practices  in  respect  ' 
to  furnishing  stockyard  services  to  be  established,  observed,  or  enforced  by  a stockyard 
owner  in  such  stockyard;  nor  shall  the  provisions  of  Title  III  apply  to  any  stockyard  i 
owner,  market  agency,  or  dealer  in  a stockyard  in  a State  which  has  or  may  hereafter 
establish  an  agency  authorized  and  empowered  to  regulate  the  practices  or  devices 
used  or  employed  by  any  such  stockyard  owner,  market  agency,  or  dealer  in  such 
stockyard:  Provided,  That  this  section  shall  not  be  held  to  limit  the  application  of  i 
Title  III  to  any  stockyard  owner,  market  agency,  or  dealer  in  respect  to  any  matter  ' 
of  regulation  not  within  the  authority  of  such  agency. 

I want  to  say  something  in  regard  to  the  regulation  of  feed  prices..  < 
Under  the  proposed  bills  as  I have  read  them,  or  of  some  of  them, 
there  is  notice  to  be  given  of  a hearing  whenever  there  is  to  be  a. 
change  in  the  schedule  of  prices.  We,  in  the  South  St.  Paul  yards, 
handle  that  matter  by  way  of  the  commission  making  an  order,  or  ; 
sometimes  we  get  together  with  the  stockyards  company  and  get  a 
reduction  in  rate  when  the  market  is  fluctuating  up  and  down.  For 
instance,  this  last  fall  we  found  it  necessary  to  make  orders  right 
along  in  relation  to  corn,  in  order  to  hold  the  selling  price  at  the 
yards  down  within  a proper  range  of  the  market  price. 

I have  a petition  here  that  was  sent  down  during  the  last  Congress,, 
when  you  were  hearing  these  same  bills  before,  and  with  the  permis- 
sion of  the  chairman  and  the  committee  I will  now  read  same: 

St.  Paul,  Minn.,  January  26,  1921. 

To  the  honorable  House  of  Representatives  and  Senate  of  the 

United  States  of  America: 

Whereas  there  is  located  at  South  St.  Paul,  in  the  State  of  Minnesota,  one  of  the 
largest  and  most  important  stockyards  in  the  country,  and  that  stock  raisers  in  the' 
State  of  Minnesota  dispose  of  their  stock  to  a large  extent  at  such  stockyard,  employ- 
ing for  such  purpose  the  various  live-stock  dealers  and  commission  men  located, 
thereat;  and 

Whereas  the  Legislature  of  the  State  of  Minnesota,  for  the  protection  of  the  interests 
of  all  stock  raisers  disposing  of  their  stock  at  said  stockyard,  has  enacted  laws  placing 
such  stockyard  and  all  of  the  commission  men  and  dealers  engaged  in  business  thereat, 
under  the  supervision  and  control  of  officials  of  the  State  of  Minnesota;  and 

Whereas  such  State  regulation  has  proven  to  be  of  great  benefit  to  all  persons;  j 
disposing  of  their  stock  at  said  stockyards,  and  it  is  the  earnest  opinion  of  all  of  the 
signers  of  this  petition  that  local  regulation  of  such  matters  are  much  more  beneficial 
to  the  interests  of  stock  raisers  than  Federal  regulation  would  be,  and  that  the  con- 
tinuance of  the  regulation  now  provided  by  the  State  of  Minnesota  is  essential  for  the^ 
protection  of  the  stock-raising  industry  in  said  State;  and 


MEAT  PACKER. 


35 


Whereas  a bill  is  now  pending  in  Congress  which,  if  enacted  in  its  present  form,  will 
subject  stockyards  to  Federal  regulation  and  may  be  construed  to  supersede  the 
supervision  hereinbefore  mentioned  of  the  State  of  Minnesota: 

Now,  therefore,  the  undersigned  members  of  the  House  of  Representatives  and  of 
the  Senate  of  the  Legislature  of  the  State  of  Minnesota  and  other  public  officials  hereby 
respectfully  and  earnestly  petition  your  honorable  bodies  to  exclude  from  the  opera- 
tion of  said  law  the  State  of  Minnesota  and  all  other  States  wherein  local  regulation 
is  provided  by  statute. 

(Signed  by  Ole  0.  Sageng  and  58  other  State  senators,  and  57  members  of  the 
house  of  representatives,  making  116  members  of  the  house  and  senate  of  the  State  of 
Minnesota.) 

Mr.  Williams.  What  is  the  membership  of  your  house  of  repre- 
sentatives ? 

Mr.  Clague.  One  hundred  and  thirty-one. 

Mr.  Kincheloe.  What  is  the  ownership  of  the  stockyards  in 
South  St.  Paul  ? 

Mr.  Wells.  Swift  & Co.  are  the  controlling  factor. 

Mr.  Kincheloe.  Do  any  other  packers  have  any  interest  in  those 
stockyards  ? 

Mr.  Wells.  Oh,  I think  so.  Of  course,  Swift  owns  the  majority 
of  the  stock,  just  as  at  Kansas  City  the  Morris  people  own  the  majority 
and  at  Omaha  the  Armour  estate,  and  at  Sioux  City  and  St.  Joe  the 
Swifts. 

Mr.  Clague.  Are  the  farmers  satisfied  with  the  way  your  State  is 
handling  the  matter  ? 

Mr.  Wells.  Yes,  the  livestock  shippers  are.  And  in  that  con- 
nection I want  to  say  that  we  are  the  greatest  cooperative  State  in 
the  Union.  Ours  is  the  State  I believe  that  inaugurated  the  co- 
operative system  among  shippers.  We  have  an  association  com- 
posed of  several  hundred  shippers  of  live-stock.  At  their  annual 
meeting  this  year  they  adopted  a resolution  indorsing  and  com- 
mending the  work  of  the  railroad  and  warehouse  commission  at  the 
stockyards  at  South  St.  Paul.  There  is  no  question  about  the 
feeling  of  the  people  of  the  State  of  Minnesota,  and  I might  say  of 
the  entire  Northwest  at  least  among  those  that  are  shipping  to 
the  South  St.  Paul  market,  because  of  the  improvement  in  conditions 
there. 

Let  us  take  an  instance : In  having  a complaint  adjusted  theretofore 
the  man  would  go  to  the  commission  man  and  the  commission  man 
would  send  him  to  the  stockyard,  and  a shipper  would  be  shifted 
back  and  forth.  Of  course,  the  average  shipper  of  live-stock  is  un- 
acquainted with  the  ways  of  the  yard,  and  the  result  was  that  he 
went  home  dissatisfied  and  condemning  the  yard  and  everything  else. 
To-day  he  has  a place  where  he  can  go  and  put  his  matter  in  dispute 
before  an  official  of  the  State  who  will  see  that  he  gets  justice  if  he 
is  entitled  to  it,  and  get  it  at  once. 

Mr.  Purnell.  Is  that  expense  paid  by  the  State  or  the  shipper 
or  by  the  stockyards  company  ? 

Mr.  Wells.  The  entire  expense  is  paid  out  of  what  we  call  the 
State  weighing  fund. 

Mr.  Purnell.  What  is  the  annual  cost  of  your  work  there? 

Mr.  Wells.  About  $60,000. 

The  Chairman.  How  long  has  this  law  been  operating  in  Minne- 
sota ? 

Mr.  Wells.  Supervision  came  in  1919,  and  general  supervision 
of  weighing,  licensing,  etc.,  came  the  1st  of  January,  1920. 


36 


MEAT  PACKER. 


Mr.  Purnell.  How  is  the  cost  apportioned  among  the  shippers? 

Mr.  Wells.  The  cost  is  2 cents  for  cattle  and  1J  cents  for  hogs 
and  1 cent  for  sheep.  I took  200  cards  of  the  account  sales  to  as- 
certain the  cost,  or,  that  is,  how  much  the  State  got  out  of  it  and 
how  much  the  yards  got  and  how  much  the  commission  firms  got — 
the  actual  cost  in  the  yards  independent  of  freight  charges.  I 
found  that  the  State  of  Minnesota  received  1 J per  cent  of  the  amount 
of  that  bill.  Say  it  was  $30.  The  stockyards  company  received 
40  per  cent,  and  the  commission  man  58J  per  cent,  and  the  State 
of  Minnesota  1J  per  cent.  Our  1J  per  cent  looks  pretty  small  for 
the  service  we  render,  and  especially  when  you  consider  that  our 
tickets  alone  cost  us  between  $7,000  and  $8,000  a year,  and  our 
hog  shrinkers  cost  us  $8,000  more. 

Mr.  Riddick.  Does  your  organization  have  anything  to  do  with 
alleged  manipulation  of  prices  ? 

Mr.  Wells.  We  have  a State  law  on  that. 

Mr.  Riddick.  That  does  not  come  under  your  commission? 

Mr.  Wells.  No,  sir;  that  is  under  the  attorney  general  of  the 
State. 

Mr.  Kincheloe.  By  reason  of  that  law  preventing  manipulation 
do  your  growers  of  stock  get  more  money  for  their  stock  at  the 
South  St.  Paul  stockyards  than  they  do  at  Chicago  ? 

Mr.  Wells.  No;  I do  not  think  so.  I think  prices  are  fixed 
largely  on  certain  classes  of  hogs  and  cattle  by  how  the  packer  feels 
on  that  particular  day.  On  our  stockers  and  feeders  I think  we  are 
the  greatest  market  in  the  United  States,  and  there,  of  course,  we 
have  buyers  ready  to  buy.  And  in  the  matter  of  hogs  we  have 
lights  and  light  lights,  and  we  have  outside  buyers  buying  them  in 
for  themselves.  One  firm  is  feeding  on  garbage  about  5,000  head 
at  Buffalo  and  about  5,000  at  Detroit,  and  they  come  from  our  yards. 
They  have  the  garbage  contracts  and  buy  all  our  lights  and  light 
lights  that  they  can  get  hold  of  to  ship  to  those  places  to  feed  them. 

Mr.  Tincher.  You  heartily  indorse  the  principle  of  the  proposi- 
tion that  brought  about  legislation  which  resulted  in  the  regulation 
of  your  stockyards  at  South  St.  Paul,  don’t  you? 

Mr.  Wells.  Oh,  yes. 

Mr.  Tincher.  You  think  it  has  had  a wholesome  effect? 

Mr.  Wells.  There  is  no  doubt  about  that.  When  we  went  into 
the  yards  we  were  met  by  the  greatest  opposition.  Our  bills  were 
fought  bitterly  in  the  legislature  by  the  stockyards’  representatives. 

Mr.  Tincher.  The  greatest  stock  market  there  is  in  the  world, 
the  greatest  stockyards  in  the  world,  are  at  Chicago.  Assuming  that 
the  Illinois  Legislature  would  not  do  as  your  legislature  has  done,  i 
there  should  be  some  legislation  regulating  them,  shouldn’t  there  ? 
You  agree  to  that  principle,  do  you? 

Mr.  Wells.  One  of  the  live-stock  professors  in  the  State  agri- 
cultural school  sent  down  to  me  and  I furnished  him  with  five  sets 
of  our  laws  to  send  out  to  different  States,  and  Iowa  has  one  set,  j 
and  Illinois  one  set,  and  Kansas  one  set,  and  some  other  States. 

Mr.  Tincher.  We  passed  a law  out  in  Kansas,  but  it  did  not  do 
much  good  because  our  stockyards  are  over  in  Missouri.  And  I am 
afraid  they  will  not  pass  any  law  in  Missouri. 

Mr.  Clague.  When  complaint  is  made  to  you  at  your  yards  at 
South  St.  Paul  as  a rule  it  is  adjusted  that  day,  isn’t  it? 


i 


MEAT  PACKER. 


37 


Mr.  Wells.  Oh,  yes.  The  shipp 3r  goes  home  in  the  afternoon  all 
fixed  up.  We  are  right  in  touch  with  every  commission  firm  and 
with  the  stockyards  company,  and  we  are  all  in  one  building,  and 
it  does  not  take  long  to  run  down  a complaint. 

Mr.  Tincher.  If  we  had  the  power  to  pass  the  necessary  legisla- 
tion as  far  as  stockyards  are  concerned,  and  gave  you  authority  to 
regulate  the  South  St.  Paul  yards,  you  would  regulate  them  the  same 
as  you  do  now,  wouldn’t  you  ? 

Mr.  Wells.  Yes,  sir;  just  the  same.  These  laws  have  been  the 
result  of  the  consensus  of  opinion  of  the  shippers  in  the  Northwest 
meeting  from  time  to  time  to  devise  laws.  The  stock  growers  and 
shippers  are  back  of  every  one  of  these  laws. 

Mr.  Tincher.  Admitting  that  legislation  is  necessary,  either 
Federal  or  State,  for  the  regulation  of  stockyards  where  there  is  not 
already  legislation,  and  if  your  statement  is  even  partially  correct 
that  the  livestock  market  depends  upon  how  the  packer  feels,  it  is  just 
as  necessary  to  pass  some  legislation  regulating  the  packer  as  it  is  the 
stockyards,  isn’t  it? 

Mr.  Wells.  Well,  I have  my  own  opinion  on  it. 

Mr.  Tincher.  You  are  in  a pretty  good  position  to  know  some- 
thing about  the  matter. 

Mr.  Wells.  Of  course,  we  are  all  selfish.  We  can  not  blame  them 
for  that.  They  are  out  there  to  buy  the  stock  just  as  cheaply  as  they 
can,  and  the  commission  men  are  out  there  to  get  just  as  much  for  the 
stock  as  they  can  get. 

Mr.  Tincher.  You  spoke  of  two  classes  of  hogs,  and  that  you  had 
hog  shrinkers  to  prevent  too  much  shrinking.  Before  you  inaugur- 
ated that  system  I suppose  they  docked  hogs  for  some  reasons  that 
were  not  necessary  to  be  docked? 

Mr.  Wells.  Yes,  sir. 

Mr.  Tincher.  And  they  always  determined  that  question  in  favor 
of  the  packer  ? 

Mr.  Wells.  Oh,  yes;  they  did  it  about  the  same  as  you  and  I 
would  do  it  if  we  were  there  ourselves  in  a similar  capacity. 

Mr.  Tincher.  And  the  farmer  shipping  in  his  hogs  to  the  stock- 
yards  is  entitled  to  that  protection  ? 

Mr.  Wells.  Oh,  yes;  certainly  he  is. 

Mr.  Tincher.  But  hogs  are  shipped  to  lots  of  places  where  he  does 
not  have  that  protection  ? 

Mr.  Wells.  Of  course.  Every  yard  has  its  own  rules  and  regula- 
tions where  not  otherwise  regulated.  There  is  no  question  that  every 
stockyard  in  this  country  should  be  regulated. 

Mr.  Kincheloe.  Do  you  think  there  has  been  an  increase  in  busi- 
ness there  as  the  result  of  this  law  ? 

Mr.  Wells.  Absolutely.  We  came  from  fifth  place  to  fourth  place. 

Mr.  Kincheloe.  Was  that  because  of  the  law  or  an  increase  in  the 
growing  of  stock  ? 

Mr.  Wells.  We  get  a good  deal  from  southern  Minnesota  that 
formerly  went  to  Chicago,  and  from  other  places.  We  are  working 
all  the  time  through  these  cooperative  shippers  to  have  them  send 
their  stock  to  South  St.  Paul.  Another  thing,  we  are  in  touch  con- 
stantly by  phone  with  the  different  shippers.  I may  get  a message 
from  a shipper  saying  that  he  has  ordered  cars  for  that  morning  and 
the  railroad  company  failed  to  deliver  them,  and  that  his  stock  are 
in  the  pen  and  wanting  to  know  what  he  shall  do.  I immediately 


38 


MEAT  PACKER. 


get  in  touch  with  the  railroad  company,  and  the  next  morning  or  the 
following  day  the  cars  are  pretty  sure  to  be  there.  I get  assurance 
from  the  railroad  company  that  they  will  be  there,  and  I inform  the 
prospective  shipper  over  the  phone,  and  he  is  ready  to  load. 

We  are  constantly  looking  after  loading  facilities  out  in  the  country. 
The  railroad  and  warehouse  commission  takes  that  up  with  the  rail- 
road companies  to  see  that  the  shippers  are  afforded  proper  protec- 
tion in  the  way  of  water.  You  know  that  hogs  have  to  be  sprinkled 
during  hot  weather,  and  when  shipped  they  have  to  have  watering 
stations.  And  we  see  that  cinders  are  placed  in  the  yards  to  keep 
them  out  of  the  mud,  and  a thousand  and  one  things  are  coming  up 
from  day  to  day.  One  of  these  things  may  amount  to  very  little  in 
itself  but  in  the  aggregate  they  amount  to  a great  deal  if  not  properly 
attended  to. 

Mr.  Purnell.  The  statement  that  the  prices  paid  depend  largely 
upon  the  way  the  packers  feel  is  very  interesting  to  me,  and  really 
strikes  at  the  heart  of  this  investigation.  I wonder  if  you  are  in  posi- 
tion to  give  to  the  committee  the  benefit  of  any  definite  information 
you  have  along  that  line;  any  specific  evidence  of  collusion  on  the 
part  of  any  packers  to  control  prices  or  to  keep  them  down.  ? 

Mr.  Wells.  No;  I have  no  evidence  of  that  kind.  In  fact,  I have 
paid  very  little  attention  to  that  subject.  But  I can  tell  you  any 
afternoon  if  Mr.  Hormel,  of  Austin,  Minn.,  has  been  on  the  market 
that  day  ? 

Mr.  Purnell.  How  can  you  do  that  ? 

Mr.  Wells.  Because  if  he  comes  in  and  ships  a couple  of  thousand 
hogs,  as  he  usually  does,  I know  that  the  market  is  up  from  15  cents 
to  40  cents  a hundred. 

Mr.  Purnell.  What  is  the  cause  of  his  coming  there  and  buying 
that  day? 

Mr.  Wells.  He  has  to  come  there  to  get  his  hogs.  At  Austin,  in 
the  first  place,  they  have  the  Hormel  plant.  The  Wilson  people  have 
come  in  on  the  west  side  of  the  State,  in  the  pipestone  country,  and 
commenced  to  buy  hogs  very  liberally,  and  they  thereby  cut  off  a 
good  deal  of  Hormel’s  supply  in  that  territory.  And  all  he  has  is 
what  is  in  his  immediate  territory  and  he  comes  to  South  St.  Paul  to 
get  what  he  needs  to  keep  his  plant  running. 

Mr.  Purnell.  He  is  an  independent  packer  ? 

Mr.  Wells.  Yes,  sir.  But  he  buys  nothing  but  hogs. 

Mr.  Purnell.  Is  there  any  general  complaint  made  to  you  by  the 
shippers  of  the  prices  they  are  paid  ? 

Mr.  Wells.  No;  they  do  not  express  it  in  that  way.  They  use 
much  stronger  language. 

Mr.  Riddick.  From  your  experience  and  observation  would  you 
say  that  there  has  been  competition  or  hasn’t  been  in  the  buying  at 
the  South  St.  Paul  stockyards  ? 

Mr.  Wells.  I do  not  think  so. 

Mr.  Purnell.  What  was  your  answer  to  that  question  ? You  say 
you  do  not  think  so.  Do  you  mean  that  there  has  not  been  competi- 
tion ? 

Mr.  Wells.  No,  sir. 

Mr.  Riddick.  What  do  you  base  that  statement  on  ? 

Mr.  Wells.  For  instance,  there  is  a bunch  of  several  thousand 
cattle  in  the  long  pens.  You  will  find  a buyer  for  one  plant  going 
along,  and  he  is  offering  8 cents  to  9 cents  a pound  for  them,  and  after 


MEAT  PACKER. 


39 

a while  another  buyer  comes  along  and  says  “I  will  give  you  8 cents 
or  9 cents  a pound.’ ’ I do  not  see  any  rise  in  price  as  a result  of  the 
two  bids. 

Mr.  Riddick.  Are  there  only,  two  packers  buying  there  ? 

Mr.  Wells.  There  are  two  or  three  big  packers  and  two  or  three 
independent  packers  that  buy,  only  independents  in  the  State. 

Mr.  Voigt.  When  Hormel  comes  along  the  price  goes  up  ? 

Mr.  Wells.  Yes,  sir. 

Mr.  Voigt.  Do  you  attribute  that  to  the  fact  that  an  additional 
man  comes  into  the  market,  or  do  you  have  a suspicion  that  the  big 
packers  put  up  the  price  on  Hormel  ? 

Mr.  Wells.  They  are  forced  to  do  it.  His  order  buyers  are  going 
to  fill  the  order  that  day  and  ship  them  out,  and  they  may  have  to 
pay  more  money  to  do  it. 

Mr.  Voigt.  Why  can  not  Hormel  get  what  he  wants  by  bidding 
5 or  10  cents  over  the  bid  of  the  big  packers  ? 

Mr.  Wells.  Because  the  other  fellows  want  those  hogs,  too. 

Mr.  Tincher.  You  do  not  haye  to  see  Hormel  in  order  to  tell  that 
he  has  been  there.  You  can  tell  by  the  market  ? 

Mr.  Wells.  Yes,  sir. 

Mr.  Ten  Eyck.  Those  independent  packers  that  bid  there  every 
day,  do  they  always  bid  the  same  price  ? 

Mr.  Wells.  No,  sir;  they  buy  off -grade  stuff  usually  and  buy  it  as 
cheaply  as  they  possibly  can. 

Mr.  Ten  Eyck.  They  are  not  in  competition  with  the  other  people 
at  all? 

Mr.  Wells.  No;  these  other  fellows  are  not  really  in  competition. 
They  do  not  kill  a great  many  head  a day,  and  usually  it  is  a grade  of 
stock  that  the  other  packers  are  not  anxious  for. 

Mr.  Purnell.  How  do  the  prices  paid  at  your  market  compare 
with  the  prices  the  same  day  at  other  markets,  such  as  Chicago  and 
Kansas  City  ? 

Mr.  Wells.  They  generally  run  along  about  the  same. 

Mr.  Kincheloe.  You  mean  that  is  on  the  day  when  the  inde- 
pendent packers  are  not  there  for  hogs  ? 

Mr.  Wells.  Yes,  sir.  It  is  often  remarked  in  the  office  “Hormel 
is  in  to-day.” 

Mr.  Purnell.  Does  he  buy  a particular  kind  of  hog  ? 

Mr.  Wells.  Yes,  sir;  he  tries  to  get  200-pound  hogs. 

Mr.  Purnell.  Is  it  possible  that  he  may  have  a particular  trade 
that  he  caters  to  which  will  pay  a little  more  for  the  product  ? 

Mr.  Wells.  Possibly  that  is  true.  But  the  same  class  of  hogs 
probably  would  go  in  to  Armour  or  Swift.  They  probably  have  the 
same  trade  that  he  has  which  would  call  for  that  class  of  hogs. 

Mr.  Voigt.  It  is  your  contention  that  there  is  no  competition 
between  the  big  packers  in  your  market  ? 

Mr.  Wells.  Oh,  I do  not  think  there  is. 

Mr.  Riddick.  What  proportion  of  the  cattle  that  go  into  the 
South  St.  Paul  stockyards  are  not  sold  out  to  the  packers  but  go 
out  to  the  country  to  be  fed  ? 

Mr.  Wells.  Well,  that  varies  according  to  the  season  of  the  year. 

Mr.  Riddick.  Is  it  not  a considerable  portion  at  some  seasons  of 
the  year  ? 

Mr.  Wells.  Well,  we  had  75,000  cars  in  last  year  of  all  classes  of 
stock,  and  I should  judge  that  25  per  cent  of  those  went  out  for  feeding 


40 


MEAT  PACKER. 


purposes.  Last  year  we  had  a great  many  Canadian  cattle,  but  they 
do  not  come  there  any  more  on  account  of  the  increase  in  freight 
rates.  They  go  down  over  other  lines,  and  we  do  not  get  them  any 
more.  There  are  some  that  go  through  to  Chicago  as  a rule. 

Mr.  Riddick.  I know,  as  a matter  of  fact,  that  a great  many 
thousand  cattle  do  go  out  of  the  South  St.  Paul  market  to  feeders. 

Mr.  Wells.  Yes,  sir. 

Mr.  Riddick.  And  the  people  who  buy  those  cattle  have  to  buy 
them  in  competition  with  the  packers  ? 

Mr.  Wells.  Yes,  sir. 

Mr.  Riddick.  And  very  sharp  competition  at  times  ? 

Mr.  Wells.  Yes,  sir. 

Mr.  Riddick.  You  think  they  would  amount  to  25  per  cent  of  all 
your  receipts  ? 

Mr.  Wells.  Yes,  sir. 

The  Chairman.  Have  you  a copy  of  your  rules  and  regulations,  and 
also  of  the  act? 

Mr.  Wells.  I have  everything  except  the  weighing.  I have  not  a 
copy  of  the  rules  and  regulations  promulgated  by  the  railroad  and 
warehouse  commission  with  me.  I think  I gave  you  a copy  in  your 
office.  I have  all  of  the  laws  relating  to  the  matter,  except  the  law 
relating  to  weighing  and  supervision  of  scales. 

The  Chairman.  What  is  the  pleasure  of  the  committee  as  to  j 
making  them  a part  of  the  record  ? 

Mr.  Tincher.  I think  they  ought  to  go  into  the  record. 

The  Chairman.  Without  objection  it  is  so  ordered. 

Mr.  Wells.  I will  now  hand  them  to  the  reporter. 

(The  laws  referred  to  follow:) 

Laws  Relating  to  the  Railroad  and  Warehouse  Commission,  Enacted  at  the 
Legislative  Session  of  1919. 

■ 

[Chapter  231,  H.  F.  No.  148.  An  act  requiring  stockyards  at  terminal  markets  to  he  provided  with  j 

feeding  and  water  troughs.] 

Be  it  enacted  by  the  Legislature  of  the  State  of  Minnesota:  \ «s 

Section  1.  Sanitary  watering  and  feeding  troughs  at  stockyards:  Every  stockyard  ) 
at  a terminal  mxrket  in  the  State  of  Minnesota  at  which  live  stock  is  received  or  1 
shipped  shall  be  provided  with  sanitary  watering  troughs  of  iron,  concrete,  or  other 
sanitary  material,  and  every  yard,  pen,  or  inclosure  at  any  such  terminal  in  which 
hogs  are  received  or  shipped  shall,  in  addition  to  the  watering  troughs  above  specified, 
be  provided  with  feeding  troughs,  within  six  months  after  the  passage  of  this  act. 

Sec.  2.  Violation  a misdemeanor:  Any  firm,  person,  or  corporation,  violating  the 
provisions  of  this  act  shall  be  deemed  guilty  of  a misdemeanor  and  upon  conviction 
thereof  shall  be  punished  bv  a fine  of  not  less  than  .$10  nor  more  than  $100  for  each 
30  days’  continuance  of  such  violation,  and  it  shall  be  the  duty  of  the  railroad  and 
warehouse  commission  to  see  that  the  provisions  of  this  act  are  enforced,  and  it  may 
specify  the  size  and  number  of  each  kind  of  troughs  to  be  provided  for  the  different 
stockyards  in  the  State,  and  shall  enforce  the  use  of  such  troughs. 

Sec.  3.  This  act  shall  take  effect  and  be  in  force  from  and  after  its  passage. 

Approved  April  12,  1919. 

[Chapter  461— H.  F.  No.  933.  An  act  defining  and  regulating  public  stockyards,  placing  them  under  the 
supervision  and  control  of  the  railroad  and  warehouse  commission,  and  providing  penalties.] 

Be  it  enacted  by  the  Legislature  of  the  State  of  Minnesota: 

Section  1.  “Public  stockyards”  as  used  herein  means  all  stockyards  into  which 
live  stock  is  received  for  the  purpose  of  exposing  the  same  for  sale  or  for  feeding  the 
same  and  doing  business  for  compensation.  “Person”  as  used  herein  includes  any 
person,  copartnership,  association,  or  corporation  doing  business  in  this  State. 
“Operator”  as  used  herein  means  any  person  owning  or  operating  a public  stockyards 
in  this  State.  “Commission”  as  used  herein  means  the  railroad  and  warehouse  com- 
mission. In  construing  this  act  gender  and  number  may  be  disregarded. 


MEAT  PACKER. 


41 


Sec.  2.  The  railroad  and  warehouse  commission  is  hereby  vested  with  the  same 
jurisdiction  and  supervisory  power  over  public  stockyards  doing  business  in  this 
State  as  it  now  has  over  railroad  companies. 

Sec.  3.  Every  public  stockyard  operator  shall  annually,  on  the  31st  day  of  Decem- 
ber, file  with  the  commission,  on  a form  prepared  by  it,  a statement  certified  and 
sworn  to,  stating  the  number  of  head  of  cattle,  calves,  hogs,  sheep,  horses,  and  mules 
received  in  such  stockyard  during  the  preceding  ^ear,  and  such  other  facts  as  the 
commission  may  require. 

Sec.  4.  It  shall  be  the  duty  of  every  public  stockyard  operator  to  furnish  reasonable, 
adequate  service  and  facilities  for  the  accommodation  of  the  public,  and  the  rates, 
charges,  and  prices  of  such  stockyards  for  the  services  performed  by  it  shall  be  fair 
and  reasonable.  All  unreasonable  and  excessive  rates,  charges,  and  prices  are  hereby 
declared  unlawful. 

Sec.  5.  Within  60  days  after  the  taking  effect  of  this  act  it  shall  be  the  duty  of  every 
public  stockyard  operator  to  forthwith  file  with  the  commission  a schedule  of  its 
rates,  charges,  and  prices  for  driving,  watering,  feeding,  yarding,  weighing,  and 
caring  for  stock  and  for  every  kind  of  service  performed  by  it,  together  with  all  rules 
and  regulations  used  in  the  conduct  of  the  business  of  public  stockyards,  all  of  which 
shall  be  kept  on  file  by  the  commission  and  shall  be  open  to  public  inspection  . The 
commission  may  require  each  such  operator  to  post  for  public  inspection  at  designated 
places  so  much  of  said  schedule  and  regulations  as  it  deems  necessary  for  the  informa- 
tion of  the  public. 

Sec.  6.  Whenever  such  rates,  schedules,  or  regulations  are  found  to  be  unreasonable 
by  the  commission,  said  commission  shall,  upon  its  own  motion,  or  upon  complaint, 
prescribe  reasonable  rates,  charges,  and  regulations  to  supersede  those  found  unreason- 
able, and  such  new  rates,  charges,  or  regulations  shall  be  filed  in  place  of  those  super- 
seded. No  charges,  rates,  or  regulations  filed  with  the  commission  shall  be  changed  by 
anv  such  operator  without  an  order  of  the  commission  sanction!  ng  the  same . Proceedings 
before  the  commission  shall  be  commenced  and  conducted  in  the  same  manner  that 
proceedings  affecting  railroads  are  now  commenced  and  conducted  and  appeals  from 
orders  of  the  commission  may  be  taken  in  the  same  manner  and  to  the  same  extent  as 
appeals  may  be  taken  from  orders  of  the  commission  affecting  railroads. 

Sec.  7.  Whenever,  in  the  judgment  of  the  commission,  any  public  stockyard  fails 
in  any  respect  to  comply  with  the  law,  or  any  repairs  or  improvements  are  necessary, 
or  reasonable  addition  to  or  change  of  its  stockyard  facilities,  or  any  change  in  the 
mode  of  operating  such  stockyards  or  conducting  its  business  will  promote  the  security 
o:'  convenience  of  the  public,  said  commission  by  a written  order  to  be  served  as  a 
summons  in  a civil  action  shall  require  compliance  with  such  law  or  the  making  of 
such  repairs,  additions,  or  change.  In  case  of  disobedience  to  said  order  said  commis- 
sion may  cause  an  action  to  be  commenced  for  the  enforcement  thereof. 

Sec.  8.  Said  commission  is  hereby  authorized  and  empowered  to  adopt  and  enforce 
reasonable  rules  and  regulations  governing  the  sanitary  conditions  in  such  public 
stockvards,  the  care  of  the  animals  therein,  the  receiving  and  shipping  of  the  same, 
and  the  general  service  performed  by  such  stockyards. 

Sec.  9.  It  shall  be  unlawful  for  any  public  stockyards  operator  to  sell  and  deliver 
at  the  rate  of  less  than  2,000  pounds  for  a ton  of  hay  or  any  part  thereof,  or  to  sell  and 
deliver  less  than  70  pounds  of  corn  in  the  ear  for  a bushel  or  less  than  56  pounds  of 
shelled  corn  for  a bushel. 

Sec.  10.  It  shall  be  unlawful  for  any  public  stockyards  operator  or  any  agent  or 
employee  to  prohibit  or  prevent  the  owner  or  his  representative  of  any  dead  stock  in 
such  yard  from  selling  or  otherwise  disposing  of  such  stock. 

Sec.  11.  Any  persons  violating  the  provisions  of  this  act  shall  be  guilty  of  a gross 
misdemeanor  and  upon  conviction  thereof  shall  be  punished  accordingly. 

Sec.  12.  All  acts  and  parts  of  acts  inconsistent  with  the  provisions  of  this  act  are 
hereby  repealed. 

Sec.  13.  This  act  shall  take  effect  and  be  in  force  from  and  after  its  passage. 
Approved  April  25,  1919. 

[State  of  Minnesota— Forty-second  session.  H.  F.,  No.  25.  Introduced  by  Messrs.  Wicker,  Gerlich,  Wil- 
kinson, Greene,  Norton,  Rako,  Neuman,  Hitchcock,  Moen,  and  Nordgren,  Jan.  5, 1921.  A bill  for  an  act 
declaring  chamber  of  commerce,  board  of  trade,  or  exchanges  where  the  members  thereof  deal  or  trade 
in  grain,  live  stock,  or  other  farm  products  to  be  public  markets,  to  regulate  the  membership  thereof, 
and  the  rights  of  members  therein.] 

Be  it  enacted  by  the  Legislature  of  the  State  of  Minnesota: 

Section  1.  Every  chamber  of  commerce,  board  of  trade,  or  exchange  maintaining 
or  operating  a regular  place  of  business  or  trading  room  for  members  only  in  which 
the  members  buy,  sell,  or  exchange  grain,  live  stock,  or  other  farm  products  for  them- 
selves or  for  others  is  hereby  declared  to  be  a public  market,  subject  to  the  provisions 
of  this  act. 


42 


MEAT  PACKER. 


Sec.  2.  Every  such  market,  whether  heretofore  or  hereafter  organized,  shall  be 
open  to  membership,  with  equal  rights  and  privileges  with  all  other  members,  to 
any  person,  firm,  company,  corporation,  or  association  desiring  to  deal  in  or  trade 
in  the  commodity  or  commodities  usually  dealt  in  on  such  market,  who  shall  make 
application  for  membership  and  whose  methods  of  business  operation  or  plan  of  organ- 
ization shall  not  conflict  with  or  contravene  any  reasonable  rule,  regulation,  or  by-law 
of  such  market.  All  members  shall  be  required  to  comply  with  all  reasonable  rules, 
regulations,  and  by-laws  of  such  organization,  which  may  include  the  payment  of  a 
membership  fee  and  reasonable  assessments  equally  applicable  to  all  members.  The 
words  “company,”  “corporation,”  or  “association”  herein  designated  shall  include 
cooperative  corporations  or  associations  organized  under  the  laws  of  the  State  of 
Minnesota.  Any  rule,  regulation,  or  by-laws  of  such  market  which  shall  be  designed 
or  construed  as  controlling,  limiting,  or  modifying  the  articles  of  incorporation,  con- 
stitution, or  by-laws  of  any  association,  company,  or  corporation  in  the  distribution 
of  its  profits  to  its  stockholders  and  members  shall  be  deemed  to  be  unreasonable. 

Sec.  3.  Every  such  chamber  of  commerce,  board  of  trade  or  exchange  which  shall 
adopt  any  rule,  regulation,  by-laws  or  order  of  whatever  kind  or  form,  or  which  makes 
any  order  in  violation  of  the  provisions  of  this  Act,  or  which  shall  refuse  or  unreason- 
ably delay  the  admission  of  any  such  applicant  to  full  and  equal  membership  in  any 
such  organization,  or  which  shall  refuse  to  trade  or  deal  with  any  member  or  permit 
any  member  to  refuse  so  to  deal  with  any  other  member  on  an  equal  basis  with  all 
other  members,  or  which  shall  adopt,  prescribe,  construe,  or  apply  any  rule,  order  or 
regulation  which  shall  have  the  effect  of,  or  tends  to,  avoid  or  violate  any  of  the  pro- 
visions of  this  act  is  hereby  declared  to  be  a monoply  in  restraint  of  trade  and  guilty 
of  a felony  and  may  be  prosecuted  as  provided  by  law,  and  further  trading  in  said 
phamber  of  commerce,  board  of  trade  or  exchange,  either  by  the  organization  itself 
or  any  member  thereof  shall  be  unlawful. 

Sec.  4.  Whenever  any  such  chamber  of  commerce,  board  of  trade  or  exchange  or 
any  officer  or  agent  thereof  shall  violate  any  of  the  provisions  of  this  act,  the  attorney 
general  shall  prosecute  such  organization,  officer  or  agent  thereof  for  such  violation, 
and  shall,  by  quo  warranto,  institute  proceedings  in  the  name  of  the  State  of  Minne- 
sota, to  dissolve  such  organization  and  prevent  its  further  operation,  and  the  said 
attorney  general  shall  also,  by  injunction,  restrain  the  organization  and  all  members 
thereof  from  thereafter  continuing  in  such  violations  and  from  any  further  trading  in 
such  market,  either  directly  or  indirectly. 

Sec.  5.  This  act  shall  take  effect  from  and  after  its  passage. 

[State  of  Minnesota.  Forty-second  session.  S.  F.,  No.  510.  Introduced  by  Messrs.  Cumming,  Naplin, 
and  Johnson,  February  16,  1921.  Referred  to  committee  on  railroads.  Reported  back  February  25, 
1921.  A bill  for  an  act  to  amend  section  8956  of  the  General  Statutes  of  1913,  relating  to  the  transporta- 
tion of  live  stock.] 

Be  it  enacted  by  the  Legislature  of  the  State  of  Minnesota: 

Section  1.  All  persons,  other  than  live-stock  commission  merchants,  commonly 
known  as  dealers,  speculators,  traders,  or  scalpers,  engaged  in  the  business  of  buying 
and  selling  live  stock  at  any  public  stockyards,  shall  for  the  purposes  of  this  act  be 
known  as  “live-stock  dealers.”  Every  such  live-stock  dealer,  before  engaging  in 
such  business,  shall  first  procure  a license  from  the  railroad  and  warehouse  commis- 
sion, hereinafter  called  the  commission,  and  shall  file  with  the  commission,  and 
acceptable  to  the  commission,  a surety  bond  to  the  State  of  Minnesota  in  the  sum  of 
$1,000.  Such  bonds  shall  be  continuous  surety  bonds  and  be  conditioned  for  the 
faithful  discharge  of  all  duties  as  a live-stock  dealer  operating  under  this  act  and  full 
compliance  with  the  law  of  the  State  and  rules  and  regulations  of  the  commission 
relative  thereto.  The  said  commission  may  provide  rules  and  regulations  relating 
to  said  live-stock  dealers  in  the  buying  and  selling  of  live  stock  at  such  public  stock- 
yards. 

Sec.  2.  Licenses  shall  only  be  issued  upon  written  application  which  shall  state 
the  name  of  the  individual,  firm,  or  corporation,  and  each  member  of  the  firm  or  officer 
of  the  corporation,  the  point  or  points  at  which  the  applicant  intends  to  do  business, 
post-office  address,  and  the  location  of  the  general  office  of  such  applicant.  All 
licenses  shall  expire  upon  the  31st  day  of  December  following  the  date  of  issuance. 
Such  license  shall  be  posted  in  a conspicuous  place  in  the  office  of  the  licensee. 
The  fee  for  each  license  must  accompany  the  application  and  shall  be  $10.  All 
license  fees  shall  be  deposited  in  the  State  treasury,  to  be  credited  to  the  live-stock 
weighing  fund,  and  paid  out  only  on  order  of  the  commission  and  the  auditor’s  war- 
rant. The  interest  received  from  deposits  of  said  moneys  shall  be  credited  on  the 
first  of  each  month  to  such  fund,  and  notice  of  the  amount  of  such  interest  be  sent 
to  the  commission. 

Sec.  3.  Any  person,  persons,  firm,  or  corporation  engaged  in  the  business  of  buying 
and  selling  any  live  stock  as  such  dealer,  who  fails  or  neglects  to  comply  with  any  of 


MEAT  PACKER. 


43 


the  provisions  of  this  act  or  any  of  the  rules  and  regulations  of  the  commission  therein 
provided  for,  shall  be  guilty  of  a misdemeanor,  and  upon  conviction  thereof  in  any 
court  having  competent  jurisdiction  shall  be  punished  by  a fine  or  imprisonment. 
The  commission  is  hereby  authorized  either  upon  such  conviction  or  upon  its  own 
findings,  after  investigation  and  hearing,  if  the  facts  warrant  it,  to  cancel  the  license 
of  any  person,  persons  firm,  or  corporation  guilty  of  any  violation  of  law,  subject  to 
the  right  of  the  licensee  to  appeal  from  such  order  to  the  court.  Where  a license  has 
been  canceled  and  the  order  of  the  commission  canceling  same  is  sustained  by  the 
court,  in  case  of  appeal,  the  commission  may  refuse  to  issue  any  license  to  such  person, 
persons,  firm,  or  corporation  for  the  term  of  one  year. 

Sec.  4.  The  commission  shall  have  the  right  to  examine  any  and  all  books,  records, 
and  accounts  of  any  live-stock  dealer.  Any  live-stock  dealer  and  any  agent  or 
employee  in  charge  of  such  books,  records,  or  accounts  who  shall  fail  or  refuse  to 
submit  such  books,  records,  or  accounts  for  the  examination  of  said  railroad  and  ware- 
house commission  shall  be  guilty  of  a misdemeanor. 

Sec.  5.  Exemptions:  The  term  “live  stock”  shall  include  cattle,  sheep,  hogs, 
horses,  and  mules.  Nothing  in  this  act  shall  apply  to  any  person,  persons,  firm, 
copartnership,  association  or  corporation,  who  ship  their  own  consignment  of  live 
stock,  or  who  shall  buy  live  stock  for  their  own  use  or  for  the  purpose  of  feeding. 

Sec.  6.  This  act  shall  take  effect  and  be  in  force  from  and  after  its  passage. 

[State  of  Minnesota.  Forty-second  session.  S.  F.,  No.  291.  Introduced  by  Messrs.  Bonniwell  and  Kuntz, 
January  26,  1921.  Referred  to  committee  on  agriculture  and  agricultural  markets.  Reported  back 
February  18, 1921.  A bill  for  an  act  relating  to  live-stock  exchanges  and  to  the  rules  and  regulations  of 
such  exchanges.] 

Be  it  enacted  by  the  Legislature  of  the  State  of  Minnesota: 

Section  1.  Any  rule,  by-law,  regulation,  or  requirement  of  a live-stock  exchange 
or  association  maintaining  a place  of  business  for  its  members  where  any  live  stock  is 
bought,  sold,  or  exchanged  for  themselves  or  for  others,  to  the  effect  that  no  member 
thereof  shall  buy,  sell,  or  exchange  live  stock  with  a person  who  is  not  a member 
thereof,  is  hereby  declared  to  be  contrary  to  public  policy  and  is  made  null  and  void, 
and  the  dealing  in  live  stock  by  a member  of  such  an  association  with  a nonmember 
shall  not  work  any  penalty  to  such  member,  nor  shall  such  dealing  be  cause  for  a 
cancellation  or  forfeiture  of  membership  in  such  live-stock  exchange  or  association. 

Sec.  2.  Whenever  any  such  live  stock  exchange  or  association,  or  any  officer  or 
agent  thereof,  shall  violate  any  of  the  provisions  of  this  act,  the  attorney  general  shall 
prosecute  such  organization,  officer  or  agent  for  such  violation,  and  shall,  by  appro- 
priate legal  proceedings  in  the  name  of  the  State,  ask  the  dissolution  of  such  organiza- 
tion and  .prevent  its  further  operation,  and  said  attorney  general  shall  also,  by  in- 
junction or  other  appropriate  legal  remedy,  restrain  such  organization  and  all  members 
thereof  from  thereafter  continuing  in  such  violations  and  from  any  further  trading 
in  such  exchange  or  association  either  directly  or  indirectly. 

Sec.  3.  This  act  shall  take  effect  and  be  in  force  from  and  after  its  passage. 

[State  of  Minnesota.  Forty-second  session.  H.  R.,  No.  954.  Introduced  by  Messrs.  Darby  and  Grant, 
March  11,  1921.  Referred  to  committee  on  dairy  products  and  live  stock.  Reported  back  March  24, 
1921.  A bill  for  an  act  to  amend  section  2 of  chapter  39,  Special  Session  Laws  of  1919,  relating  to  the 
licensing  by  the  railroad  and  warehouse  commission  of  all  commission  merchants,  brokers,  factors  or 
agents  engaged  in  handling,  buying,  selling  or  soliciting  consignments  of  live  stock  at  any  public  stock 
yards,  and  to  fix  the  commission  that  may  be  charged  by  them,  providing  rules  and  regulations  and 
providing  penalties.] 

Be  it  enacted  by  the  Legislature  of  the  State  of  Minnesota: 

Sec.  1.  Section  2 of  chapter  39,  Special  Session  Laws  of  1919,  relating  to  the  licens- 
ing by  the  railroad  and  warehouse  commission  of  all  commission  merchants,  brokers, 
factors  or  agents  engaged  in  handling,  buying,  selling  or  soliciting  consignments  of 
live  stock  at  any  public  stock  yards,  and  to  fix  the  commission  that  may  be  charged 
by  them,  providing  rules  and  regulations  and  providing  penalties,  is  hereby  amended 
to  read  as  follows : 

“Sec.  2.  On  or  before  the  1st  of  December  in  each  year  the  persons  specified  in 
section  1 of  this  act  shall  make  an  application  to  the  commission  in  writing  for  a 
license  to  conduct  the  business  of  a live-stock  commission  merchant.  This  applica- 
tion shall  set  forth  the  name  of  the  individual,  firm,  or  corporation  and  each  member 
of  the  firm  or  officer  of  the  corporation,  the  point  or  points  at  which  the  applicant 
intends  to  do  business,  post-office  address,  and  the  location  of  the  general  office  of 
such  applicant.  A separate  bond  and  license  shall  be  required  for  each  point  at 
which  such  applicant  intends  to  do  business. 

“On  or  before  the  1st  of  January  each  year  the  commission  shall  furnish  such  appli- 
cant with  a license  good  for  one  year,  such  license  to  be  posted  in  a conspicuous  place 
in  the  office  of  the  licensee.  The  fee  for  each  license  must  accompany  the  applica- 
tion for  license  and  shall  be  $25.  All  moneys  so  collected  shall  be  deposited  in  the 
State  treasury  and  known  as  the  ‘Live-stock  (commission)  weighing  fund/  and  all 


44  MEAT  PACKER. 

moneys  at  present  credited  to  the  live-stock  commission  fund  to  be  transferred  to  the 
live-stock  weighing  fund,  and  paid  out  only  on  order  of  the  commission  and  the 
auditor’s  warrant.  The  interest  received  from  deposit  of  said  moneys  shall  be  credited 
on  the  first  of  each  month  to  such  fund,  and  notice  of  the  amount  of  such  interest 
shall  be  sent  to  the  commission. 

“Such  license  may  be  revoked  by  the  commission  for  cause"  upon  notice  and 
hearing.  ’ ’ 

Sec.  2.  This  act  shall  take  effect  and  be  in  force  from  and  after  its  passage. 

[State  of  Minnesota.  Forty-second  session.  S.  F.,  No.  356.  Introduced  by  Messrs.  Bonniwell  and  Kuntz, 
February  2,  1921.  Referred  to  committee  on  agriculture  and  agricultural  markets.  Reported  back 
February  4, 1921.  A bill  for  an  act  to  amend  section  3 of  chapter  40,  Special  Session  Laws  of  1919,  entitled  j 
“ An  act  to  provide  for  the  weighing  of  live  stock  at  public  stock  yards,  under  the  jurisdiction  of  the  rail- 
road and  warehouse  commission,”  and  to  amend  the  title  by  inserting  the  words  “ Supervision  and” 
before  the  word  “weighing”  where  used  in  the  title.] 

Be  it  enacted  by  the  Legislature  of  the  State  of  Minnesota : 

Section  1.  That  the  title  of  chapter  40,  Special  Session  Laws  of  1919,  be  amended 
to  read  as  follows: 

“An  act  to  provide  for  the  supervision  and  weighing  of  live  stock  at  public  stock 
yards  under  the  jurisdiction  of  the  railroad  and  warehouse  commission.” 

Sec.  2.  That  section  3 of  chapter  40,  Special  Session  Laws  of  1919,  be  and  hereby  is 
amended  to  read  as  follows:  “The  commission  shall  prescribe  the  fee  necessary  to 
cover  the  cost  of  supervision  and  weighing  to  be  assessed  and  collected  in  such  manner  • 
as  the  commission  may  prescribe.  All  moneys  so  collected  shall  be  deposited  in  the 
State  treasury  and  known  as  the  ‘live-stock  weighing  fund,’  and  paid  out  only  on  < 
order  of  the  commission  and  the  auditor ’s  warrant.  The  interest  from  such  deposits  of  • 
said  moneys  shall  be  credited  on  the  1st  day  of  each  month  of  such  fund,  and  notice  of  ; 
the  amount  of  such  interest  shall  be  sent  to  the  commission.  ’ ’ 

Sec.  3.  This  act  shall  take  effect  and  be  in  force  from  and  after  July  1,  1921. 

[State  of  Minnesota.  Forty-second  session.  S.  F.,  No.  472.  Introduced  by  Mr.  Bonniwell,  February  11,  j 
1921.  Referred  to  committee  on  agriculture  and  agricultural  markets.  Reported  back  February  19, 1921. 

A bill  for  an  act  to  provide  for  the  sanitation,  disinfection,  and  cleaning  of  railway  cars  used  for  the  trans-  * 
portation  of  live  stock,  and  prescribing  penalties  for  the  violation  thereof.] 

Be  it  enacted  by  the  Legislature  of  the  State  of  Minnesota: 

Section  1.  It  shall  be  the  duty  of  every  railway  company  operating  a railroad 
within  this  State  to  cause  everv  railroad  car  used  in  the  transportation  of  live  stock  i 
in  this  State  to  be  properly  and  thoroughly  cleaned  by  removing  all  litter,  manure,  ; 
and  refuse  from  such  car  once  in  each  month  between  the  1st  day  of  March  and  the 
1st  day  of  December  of  each  year. 

Sec.  2.  The  State  live-stock  sanitary  board  is  hereby  authorized  to  make  reasonable  { 
rules  and  regulations  for  the  cleaning  and  disinfection  of  cars  used  for  the  transpor-  j 
tations  of  live  anmals  within  the  State  The  said  board  shall  furnish  from  time  to  \ 
time  to  each  railway  company  operating  a railroad  within  this  State  copies  of  said  | 
rules.  It  is  hereby  made  the  duty  of  each  such  railway  company  to  obey  each  and 
every  one  of  said  rules.  |j 

Sec.  3.  Any  railway  company  violating  any  of  the  provisions  of  this  act  shall  be  j 
guilty  of  a misdemeanor  and  shall,  on  conviction  thereof,  be  fined  not  less  than  $50  f 
nor  more  than  $500. 

Sec.  4.  Chapter  41,  General  Laws  1915,  is  hereby  repealed. 

Sec.  5.  This  act  shall  take  effect  and  be  in  force  from  and  after  its  passage. 

[State  of  Minnesota.  Forty-second  session.  H.  F.,  No.  195.  Introduced  by  Messrs.  Bendixen  and  ] 
Wicker,  Jan.  14,  1921.  Referred  to  the  committee  on  grain  and  warehouse.  Reported  back  Jan.  19, 
1921.  A bill  for  an  act  to  provide  for  licensing  by  the  railroad  and  warehouse  commission  of  all  persons  I 
commonly  known  as  dealers,  speculators,  traders,  or  scalpers,  other  than  live-stock  commission  mer- 
chants, engaged  in  the  business  of  buying  and  selling  live  stock  at  any  public  stockyards;  to  provide 
rales  and  regulations  and  penalties  for  violations.] 

Be  it  enacted  by  the  Legislature  of  the  State  of  Minnesota: 

Section  1.  That  section  8956  of  the  General  Statutes  of  1913,  is  and  the  same  is 
hereby  amended  so  as  to  read  as  follows: 

“Section  8956.  Every  person  who  shall  carry,  or  cause  to  be  carried,  any  live  ani- 
mals upon  any  vehicle  or  otherwise,  without  providing  suitable  racks,  cars,  crates, 
or  cages  in  which  such  animals  can  both  stand  and  lie  down  during  transportation, 
and  while  awaiting  slaughter;  every  person  who  shall  carrg  or  cause  to  be  carried  upon 
a vehicle  or  otherwise  any  live  animal  having  feet  or  legs  tied  togather,  or  in  any  other 
cruel  or  inuman  manner;  and  every  person  or  corporation  engaged  in  transporting 
live  stock  who  shall  detain  the  same  in  cars  or  compartments  for  more  than  28  consecu- 
tive hours  without  unloading  the  same  in  a humane  manner,  into  properly  equipped  j 
pens  for  rest,  water  and  feeding  for  a period  of  at  least  five  consecutive  hours,  unless 
requested  to  do  so  as  hereinafter  provided,  or  unless  prevented  by  storm  or  unavoidable 


MEAT  PACKER. 


46 


causes  which  can  not  be  anticipated  or  avoided  by  the  exercise  of  due  diligence  and 
foresight,  or  shall  permit  the  same  to  be  crowded  together  without  sufficient  space 
to  stand,  or  so  as  to  overlie,  crush,  wound,  or  kill  each  other  shall  be  guilty  of  a misde- 
meanor: Provided , That  upon  the  written  request  of  the  owner  or  person  in  custody 
of  that  particular  shipment,  which  written  request  shall  be  separate  and  apart  from 
any  printed  bill  of  lading,  or  other  railroad  form,  the  time  of  confinement  may  be 
extended  to  36  consecutive  hours.  ’ ’ 

Sec.  2.  This  act  shall  take  effect  and  be  in  force  from  and  after  its  passage. 

[State  of  Minnesota.  Forty-second  session.  H.  F.,  No.  573.  Introduced  by  Messrs.  Grant  and  Bendixen, 

February  8,  1921.  Referred  to  committee  on  grain  and  warehouse.  Reported  back  February  8,  1921. 

A bill  for  an  act  authorizing  the  railroad  and  warehouse  commission  of  the  State  of  Minnesota  to  regu- 
late the  distribution  of  railroad  cars  during  times  of  shortage.] 

Be  it  enacted  by  the  Legislature  of  the  State  of  Minnesota: 

Section  1.  The  railroad  and  warehouse  commission  of  the  State  of  Minnesota  is 
hereby  given  full  power  and  authority,  and  it  is  hereby  made  its  duty,  after  having 
given  reasonable  notice  and  upon  hearing  being  had,  to  make,  publish,  and  inforce 
from  time  to  time  such  reasonable  and  just  rules  and  regulations  for  the  distribution 
of  cars  at  stations  for  the  transportation  of  live  stock,  grain,  and  other  farm  products, 
among  the  shippers  whether  located  upon  a certain  railroad  line  or  lines,  or  custom- 
arily dependent  upon  such  railroad  line  for  their  car  supply. 

Sec.  2.  During  any  period  when  the  supply  of  cars  available  for  such  service  does 
not  meet  the  requirements  of  the  shippers,  it  shall  be  the  duty  of  the  carrier  to  main- 
tain and  apply  just  and  reasonable  ratings  of  such  shippers  to  the  extent  that  cars  are 
available,  and  to  count  each  and  every  car  furnished  to  or  used  by  such  shippers 
against  such  shippers. 

Sec.  3.  Failure  or  refusal  to  do  so  shall  be  unlawful,  and  in  respect  to  each  car  not 
so  counted  shall  be  deemed  a separate  offense,  and  the  carrier,  receiver,  or  operating 
trustee  so  failing  or  refusing,  upon  conviction,  shall  be  fined  $100  for  each  offense: 
Provided , however , That  when  nece-rity  is  found  to  exist,  of  which  the  commission  D 
advised,  either  by  its  own  investigation,  which  it  may  make  at  any  time,  or  by  hearing 
on  complaint  of  any  shipper  or  railroad  company,  the  commission  may,  by  special 
order,  require  the  railroad  company  on  whore  railroad  such  necessity  is  found  to  exist 
to  depart  to  the  extent  provided  in  such  order,  from  the  application  of  this  act  or 
any  rule  or  rules  formulated  and  established  under  the  same. 

Sec.  4.  This  act  shall  take  effect  and  be  in  force  from  and  after  its  passage. 

Mr.  Tincher.  The  packers  do  not  buy  stockers  and  feeders  on 
your  market  ? 

Mr.  Wells.  Well,  they  do  in  a way.  We  are  different  from  any 
other  market  in  the  West  for  this  reason,  that  we  have  no  corn-fed 
beef  or  finished  beef. 

Mr.  Tincher.  But  if  they  buy  them  they  buy  them  for  killing 
purposes  ? 

Mr.  Wells.  Yes,  sir. 

Mr.  Tincher.  There  is  really  no  competition,  or  it  is  not  sup- 
posed that  there  is  competition,  between  the  packer  and  the  man 
buying  for  stocking  or  feeding  purposes  ? 

Mr.  Wells.  Well,  I will  tell  you  about  that.  This  is  the  way 
the  thing  is  handled:  All  stockers  and  feeders  are  usually  put  over 
to  the  speculator.  He  usually  comes  along  and  buys  them  and 
puts  them  into  pens  and  then  he  siezes  them  up  and  picks  out  the 
best  ones,  and  replants  them  in  the  yards  and  sells  them  to  the 
packers. 

Mr.  Tincher.  And  sells  the  balance  to  the  stockers  and  feeders  ? 

Mr.  Wells.  Yes,  sir. 

Mr.  Tincher.  And  so  there  is  really  no  competition  there  ? 

Mr.  Wells.  No,  sir. 

Mr.  Tincher.  If  you  had  to  depend  upon  that  for  the  principal 
market  it  would  be  different  ? 

Mr.  Wells.  Oh,  yes. 

The  Chairman.  Do  those  rules  and  regulations  cause  the  packers  to 
incur  any  considerable  extra  expense  ? 


46 


MEAT  PACKER. 


Mr.  Wells.  Well,  I do  not  know  about  that. 

The  Chairman.  Hav.e  there  been  any  complaints  on  the  part  of 
packers  or  commission  men  against  the  Minnesota  act  ? 

Mr.  Wells.  Yes,  sir;  there  were  complaints  made  against  the  act, 
but  not  against  our  commission.  There  are  two  cases  pending  in  the 
courts  now,  for  about  $200,000,  awaiting  a decision  by  the  Supreme 
Court.  We  fixed  the  commission  charges,  and  when  I say  f<we,”  I 
mean  the  railroad  and  warehouse  commission,  we  fixed  the  amount  to 
be  charged  upon  the  selling  and  buying  of  live  stock.  We  fixed  the 
same  on  the  basis  of  a comparative  sheet  of  all  the  markets  in  the 
West.  We  took  all  the  commission  charges  of  all  the  markets  and 
from  them  made  a comparative  sheet  and  found  that  the  South  St.  ' 
Paul  yards  were  about  $2  higher  than  any  other  market,  so  we  re-  \ 
duced  that  $2  a car. 

The  Chairman.  What  was  the  commission  before  ? 

Mr.  Wells  It  runs  along  about  $14  to  $20,  or,  I should  say,  $14  to 
$18  a car.  The  commission  men  raised  the  question  that  they  were 
under  the  Lever  bill,  they  so  drew  their  pleadings  in  their  action  in  the  ; 
courts,  setting  up  the  contention  that  the  State  had  no  jurisdiction  i 
whatever  over  them.  In  that  respect  the  situation  at  South  St.  Paul  j 
is  peculiar.  At  Kansas  City  and  Chicago  there  are  suits  pending  in 
the  courts,  and  they  deny  that  they  are  under  any  Government  con- 
trol whatever.  But  in  South  St.  Paul  they  set  up  the  contention  ' 
that  they  are  under  Government  control.  That  suit  is  being  tried  in 
the  Supreme  Court  now. 

They  afterwards  applied  to  the  Secretary  of  Agriculture,  or  to  the  ? 
Bureau  of  Markets,  for  leave  to  raise  their  commission.  The  bureau, 
or  the  Secretary,  denied  their  request.  That  placed  them  outside 
the  Government,  and  they  were  outside  the  State  before.  Neverthe- 
less, they  went  on  and  raised  their  charges  from  $2  to  $8  a car,  and 
those  are  the  rates  they  are  charging  to-day.  Under  our  stipulation 
as  filed  in  the  courts  all  those  moneys  are  deposited  in  banks  subject  < 
to  the  decision  of  the  court. 

Mr.  Kincheloe.  That  is,  the  amount  of  the  overcharge? 

Mr.  Wells.  The  excess  charges. 

The  Chairman.  You  spoke  of  speculators.  Have  you  any  regu-  ; 
lations  as  to  such  transactions  ? 

Mr.  Wells.  Every  one  of  them  is  licensed  since  the  last  legisla- 
ture. Every  one  is  under  bond  to  the  State  of  Minnesota,  the  same 
as  the  commission  men,  and  are  licensed  by  the  railroad  and  ware-  1 
house  commission. 

The  Chairman.  Have  you  any  regulation  as  to  selling  direct  to  a 
country  buyer  ? 

Mr.  Wells.  We  have  now.  We  have  just  passed  what  we  call 
the  open  market  bill.  That  bill  provides  that  any  exchange  that 
attempts  to  enforce  any  rule  of  their  exchange  whereby  they  fine  a 
member  for  dealing  with  any  outside  party,  is  guilty  of  an  offense 
against  the  laws  of  the  State  of  Minnesota,  and  it  becomes  the  duty 
of  the  attorney  general  of  the  State  to  bring  an  action  to  dissolve 
the  exchange.  I notice  since  I came  down  here  that  they  have 
brought  a test  case,  and  the  same  is  now  in  court. 

The  Chairman.  I understood  you  to  say  that  about  25  per  cent  of 
all  cattle  coming  into  the  South  St.  Paul  stockyards  are  sold  direct 
to  the  country  ? 


MEAT  PACKER. 


47 


Mr.  Wells.  Yes,  sir. 

The  Chairman.  Do  you  know  of  any  regulation  as  to  that,  or  do 
you  need  any  ? The  contention  is  that  the  practice  in  some  markets 
is  not  to  sell  direct  to  the  country  buyer,  but  that  the  cattle  must  go 
through  a speculator.  Have  you  anything  of  that  kind  in  your 
yards  ? 

Mr.  Wells.  The  speculator,  you  know,  is  a member  of  the  exchange 
up  there,  so  the  same  law  would  apply  to  him.  They  are  allowed  to 
deal  with  any  person  they  want  to  without  fear  of  being  fined. 

The  Chairman.  That  is  not  covered  by  a regulation  of  your 
commission  ? 

Mr.  Wells.  No,  sir;  it  is  covered  by  law. 

The  Chairman.  You  have  no  authority  to  regulate  them  in  that 
respect  ? 

Mr.  Wells.  No,  sir;  except  that  the  State  law  regulates  thact  mat- 
ter now. 

The  Chairman.  Have  you  a copy  of  that  ? 

Mr.  Wells.  Yes,  sir;  and  it  has  been  put  in  the  record. 

Mr.  Voigt.  Can  a stranger  come  into  your  yard  there  and  buy 
cattle  ? 

Mr.  Wells.  Yes,  sir;  or  any  stranger  can  come  in  and  sell  cattle. 

Mr.  Voigt.  I mean  must  he  execute  his  business  through  some 
broker,  or  can  he  go  right  in  there  and  make  his  purchase  and  turn 
his  money  over  to  the  owner  of  the  cattle  ? 

Mr.  Wells.  Certainly.  That  is  what  we  call  the  open  market 
bill.  That  is  one  that  has  just  been  passed  by  the  State  legislature. 
It  allows  any  person  to  go  in  there  and  deal  with  any  member  of  the 
exchange  without  being  fined.  You  understand  the  situation  now 
perhaps,  and  it  is  this:  Here  are  commission  men  and  speculators 
who  all  form  a combination  I might  say  on  the  exchange.  Their 
rules  provide  that  any  man  who  deals  with  anybody  outside  will 
result  in  a fine  being  imposed  on  the  speculator  of  from  $250  to 
$1,000,  and  their  exchange  membership  forfeited.  That  makes  a 
close,  tight  wire  fence  around  that  body.  Say  you  are  a farmer, 
and  you  come  in  there  and  you  unload  your  cattle.  Say  you  have 
put  in  four  years  in  building  up  a carload  of  cattle  to  ship  to  the 
market.  You  come  in  there  and  find  that  half  of  your  carload  of 
cattle  are  killers  that  the  packers  want  and  the  other  half  are  stockers 
and  feeders.  Under  their  plan  you  could  not  deal  with  any  man  on 
that  market,  unless  you  might  find  a farmer  outside  that  you  could 
deal  with.  And  if  you  did  they  would  not  now  dare  deal  with  you. 

Mr.  Thompson.  But  this  open  market  law  that  has  been  passed 
prevents  all  that  ? 

Mr.  Wells.  Yes;  you  can  put  half  of  your  cattle,  perhaps  feeders, 
into  a pen  and  sell  them. 

Mr.  Kincheloe.  That  is  the  law  that  they  are  testing  now? 

Mr.  Wells.  Yes,  sir. 

Mr.  Voigt.  Is  the  shrinkage  an  arbitrary  amount  that  is  taken  off 
an  animal  after  it  has  been  put  over  the  scales  ? 

Mr.  Wells.  Yes,  sir. 

Mr.  Voigt.  Is  it  the  same  for  all.  animals  of  a given  class? 

Mr.  Wells.  Yes,  sir. 

Mr.  Kincheloe.  Regardless  of  how  long  they  have  been  in  the 
yards  ? 


48 


MEAT  PACKER. 


Mr.  Wells.  Oh,  they  are  never  in  the  yards  but  one  day.  The 
yards  are  cleaned  up  each  day,  of  hogs. 

Mr.  Thompson.  Who  fixes  that  shrinkage  ? 

Mr.  Wells.  Our  State  commission  and  the  packers  and  the 
shippers  agree.  In  case  of  a failure  to  agree  there  is  an  appeal  to 
the  appeal  board. 

Mr.  Thompson.  Suppose  a hog  scales  200  pounds  actual  weight?  I 

Mr.  Wells.  All  right. 

Mr.  Thompson.  Then  the  man  who  ships  that  hog  is  not  paid  for  ! 
200  pounds  but  is  paid  for  a less  amount  ? 

Mr.  Wells.  Yes,  sir. 

Mr.  Ten  Eyck.  That  is  to  balance  the  difference  between  the  live 
and  dead  weights  ? 

Mr.  Wells.  Yes.  But  there  is  no  question  about  that.  You 
take  a’hog  in  a certain  condition  and  he  will  not  dress  out. 

Mr.  Clague.  I do  not  think  Mr.  Wells  has  made  that  matter 
clear  to  you.  He  meant  only  on  certain  hogs. 

The  Chairman.  How  do  you  fix  that  shrinkage  ? 

Mr.  Wells.  I mean  this,  that  if  a certain  class  of  hogs  come  in 
there,  for  instance  one  or  two  in  a carload,  it  is  the  duty  of  the  in- 
spector to  let  it  go  through  without  shrinkage  or  to  shrink  it  accord- 
ing to  his  judgment. 

The  Chairman.  And  if  the  packer  is  not  satisfied  with  that  de- 
cision he  has  the  right  of  appeal  ? 

Mr.  Wells.  Yes,  sir. 

The  Chairman.  All  right.  I 

Mr.  Wells.  If  there  is  nothing  further  I thank  you  very  much  ? 
indeed  for  your  hearing  of  me. 

The  Chairman.  And  we  wish  to  thank  you  for  the  information 
which  you  have  given  us. 

Mr.  Wells.  Mr.  Chairman,  Mr.  Sullivan  is  going  to  St.  Paul  j 
to-night,  and  if  you  could  hear  him  for  about  five  minutes  I would  ] 
thank  you.  One  of  the  gentlemen  present  here  has  asked  me  to  j 
correct  the  record  so  that  it  will  show  that  the  packers  are  not  * 
members  of  the  exchange  at  South  St.  Paul.  That  is  true. 

The  Chairman.  We  will  be  very  glad  to  hear  Mr.  Sullivan. 

STATEMENT  OF  ME.  GEORGE  H.  SULLIVAN,  OF  STILLWATER, 

MINN. 

Mr.  Sullivan.  Mr.  Chairman  and  gentlemen  of  the  committee,  j 
as  indicated  by  Mr.  Wells  our  only  interest  in  the  pending  legisla- 
tion is  that  we  may  be  permitted  to  preserve  intact  the  system  of 
stockyards  regulation  now  provided  by  the  laws  of  the  State  of 
Minnesota. 

The  reasons  for  that  request  are  (1)  that  the  farmers  and  shippers 
of  the  State  have  confidence  in  the  local  system  of  the  regulation  of 
our  stockyards.  (2)  It  appears  also  that  the  commission  men  have 
recognized  that  there  is  some  advantage  to  them  in  this  regulation, 
because  they  have  now  commenced  to  advertise  the  fact  that  the 
South  St.  Paul  stockyards  are  under  the  regulation  of  the  State  of 
Minnesota.  They  have  no  doubt- that  because  of  that  situation  there 
is  an  advantage,  for  where  a shipper  has  an  opportunity  to  ship  to 
one  of  two  markets  by  reason  of  existing  freight  rates,  they  find  the 


MEAT  PACKER.  49 

shippers  prefer  the  South  St.  Paul  stockyards  or  a stockyards  that 
has  this  regulation. 

As  indicated  by  the  many  instances  given  to  you  by  Mr.  Wells,  you 
can  see  that  the  shipper  is  benefited  in  many  ways.  Some  of  these 
benefits  perhaps  are  not  very  great  in  themselves,  but  in  the  aggre- 
gate the  shipper  goes  to  that  market  feeling  that  he  is  under  the  pro- 
tection of  the  State  and  that  there  is  a State  official  there  to  aid  him 
in  the  solution  of  any  and  every  difficulty  that  arises.  It  has  pro- 
duced a great  improvement  in  the  actual  conduct  of  the  yards  from 
the  shipper’s  standpoint. 

As  alluded  to  by  Mr.  Wells,  there  has  been  a great  cooperative 
movement  going  on  in  the  State  of  Minnesota,  the  idea  of  which  is  to 
permit  the  farmers  of  Minnesota  to  market  their  products  and  to 
absorb  as  much  as  possible  of  what  they  have  heretofore  thought  was 
too  great  a spread  between  the  selling  price  by  the  producer  of  his 
product  and  the  selling  price  by  the  middle  man,  and  the  final  selling 
price  to  the  consumer. 

We  passed  a number  of  laws  during  the  last  session  of  the  legislature 
for  the  purpose  of  furthering  the  cooperative  movement.  It  is  the 
idea  of  many  of  our  leading  people  who  have  studied  cooperative  farm 
movements,  particularly  with  reference  to  marketing  products,  that 
there  is  room  for  a vast  improvement  in  the  marketing  of  live  stock  of 
all  kinds.  It  is  thought  that  cooperation,  that  the  cooperative  move- 
ment, may  go  much  further  than  it  is  to-day.  We  believe  that  we 
can  solve  the  problem  of  bringing  the  farmer  closer  to  the  packer  and 
of  making  a better  feeling  exist  between  them  if  our  local  regulations 
are  permitted  to  remain  intact. 

We  have  not  been  led  to  increase  our  confidence  in  Federal  regu- 
lation where  local  regulation  is  permissible  and  can  adequately  cover 
the  subject,  by  reason  of  our  experience,  particularly  in  the  grading 
of  spring  wheat.  That  is  a subject  that  has  been  taken  over  for  the 
last  four  years  at  least  by  the  Bureau  of  Markets  of  the  Department 
of  Agriculture,  and  the  way  they  have  handled  it  is  very  unsatisfac- 
tory to  us. 

And  our  State  and  the  States  of  North  and  South  Dakota  are  prac- 
tically a unit  to-day  against  the  existing  grades  established  by  the 
Bureau  of  Markets.  We  have  come  down  here  and  begged  that 
bureau  and  begged  the  Secretary  of  Agriculture  to  give  us  some  relief 
toward  a simplification  of  those  grades. 

I merely  allude  to  that  because  it  is  indicative  of  the  fears  we  in 
Minnesota  have  that  if  you  deprive  us  of  our  State  control,  or  if  you 
go  on  and  regulate  the  stockyards  in  our  State  by  Federal  regulation, 
it  may  have  a somewhat  similar  result. 

We  believe  that  our  bureau,  at  the  head  of  which  stands  Mr.  Wells, 
understands  the  problem  of  regulating  the  stockyards  of  Minnesota, 
understands  the  needs  of  our  farmers  and  shippers,  and  in  that 
respect  would  handle  the  situation  better  than  could  any  bureau 
established  in  Washington.  And  we  wish  you  would  give  earnest 
consideration  to  the  adoption  of  the  amendment  suggested  by  Mr. 
Wells  as  drafted  by  Representative  Anderson. 

Mr.  Tincher.  Before  you  passed  any  law  regulating  the  stockyards 
at  South  St.  Paul  the  conditions  were  practically  intolerable  there, 
weren’t  they? 


46985—21 4 


50 


MEAT  PACKER. 


Mr.  Sullivan.  Yes;  they  were. 

Mr.  Tincher.  If  that  be  true  of  the  situation  in  the  Nation  to-day, 
except  for  the  State  of  Minnesota,  then  perhaps  that  State  should  he 
unselfish  enough  to  spare  Mr.  Wells  to  some  national  institution  and 
let  him  regulate  all  of  them. 

Mr.  Sullivan.  I understand.  But  you  have  done  the  same  thing 
with  our  system  of  grain  inspection.  We  had  the  best  system  in 
the  United  States,  and  perhaps  the  best  in  the  world.  Now  it  is  well  j 
on  its  way  to  extinction  because  as  you  very  well  know  when  the 
Federal  Government  takes  jurisdiction  of  a subject  the  result  is  as 
they  used  to  say  of  the  United  States  courts  many  years  ago,  hungry 
for  jurisdiction,  and  it  has  extended  its  tentacles  and  entwined  them  ■ 
around  every  activity  of  the  State  until  they  died.  They  could  not 
live  any  longer.  We  know  that  we  can  not  put  up  any  of  our  State 
grades  and  have  them  stand  alongside  the  Federal  grades.  One 
wipes  out  the  other. 

Mr.  Tincher.  Speaking  about  Federal  and  State  laws,  this  com- 
mittee has  had  under  consideration  for  a week  a bill  to  regulate  trading  ' 
in  grain  futures.  Do  you  think  that  a subject  that  ought  to  be  j 
treated  in  a national  way  or  that  it  ought  to  be  left  to  the  States  ? 

Mr.  Sullivan.  I think  it  is  impracticable  to  handle  that  subject  . 
by  State  laws.  I express  no  opinion,  however,  as  to  what  benefits  i 
can  be  secured  under  that  legislation,  although  I think  some  can  if  . 
if  you  do  not  go  too  far. 

Mr.  Tincher.  Your  State  legislature  passed  a State  law? 

Mr.  Sullivan.  We  did. 

Mr.  Tincher.  Mr.  Kenning,  I believe,  was  the  name  of  the  man  who  • 
represented  himself  as  being  the  real  lawmaker  of  your  State,  though  ; 
he  holds  no  official  position,  he  telling  the  legislature  what  to  do,  says 
that  a law  was  passed  for  the  purpose  of  fooling  the  farmers. 

Mr.  Sullivan.  Well,  I suppose  Mr.  Kenning  can  be  considered  the 
greatest  legislative  authority  in  Minnesota. 

Mr.  Tincher.  Well,  he  at  least  admits  it.  \ 

Mr.  Sullivan.  I have  heard  him  a great  many  times,  but  we  do  ; 
not  pay  much  attention  to  what  he  says. 

Mr.  Williams.  He  claimed  he  was  instrumental  in  having  this  law  ; 
passed. 

Mr.  Sullivan.  Well,  if  it  was  a law  passed  with  the  intent  of  fooling 
somebody  that  may  be  true,  but  really  I do  not  know  about  that. 

But,  seriously,  we  are  very  much  interested  about  our  situation. 
We  do  not  want  to  deprive  any  other  State,  or  any  part  of  the  United 
States,  of  any  benefits  of  regulation.  But  you  know  that  it  has  been 
the  lot  of  the  State  of  Minnesota  to  be  the  pioneer  in  much  regulatory 
legislation,  particularly  of  railroads,  and  you  know  what  they  have 
done  to  us  along  that  line.  Our  railroad  and  warehouse  commission 
now  has  about  as  much  to  say  about  railroads  as  it  does  about  what 
happens  in  Siam.  And  yet  that  may  be  absolutely  necessary  on 
account  of  the  character  of  the  subject.  Here  it  is  not.  Let  our 
railroad  and  warehouse  commission  remain  in  active  control  of  the 
situation  between  the  shippers  and  the  stockyards.  Let  us  see  if  we 
can  not  make  that  relation  even  a better  one,  a closer  one,  whereby 
all  will  get  better  results.  I believe  that  as  much  as  possible  the 
Federal  Government  ought  to  permit  the  States  to  regulate  such  mat- 


MEAT  PACKER. 


51 


ters  if  they  show  any  capacity  so  to  do,  rather  than  absorb  the  entire 
subject.  It  would  seem  proper  that  an  amendment  be  incorporated 
with  or  engrafted  upon  the  law  you  propose  to  pass,  which  would 
permit  the  development  of  such  commissions  and  such  regulatory 
practices  as  we  have  in  Minnesota  rather  than  extinguish  them. 

Gentlemen  of  the  committee,  I want  to  thank  you  for  permitting 
me  to  make  this  statement. 

Mr.  Riddick.  Before  you  leave  I would  like  to  ask  you  a question: 
There  is  a certain  territory  from  which  shippers  sometimes  ship  to 
Milwaukee  and  sometimes  to  South  St.  Paul  and  sometimes  to 
Minneapolis  and  perhaps  sometimes  to  Kansas  City.  Out  in  that 
territory  there  are  men  traveling  nearly  every  day  representing  these 
different  receiving  points,  asking  the  shippers  of  stock  to  ship  to 
their  particular  place.  I was  wondering  if  the  great  benefits  exist 
as  are  claimed  for  your  stockyards,  why  the  natural  flow  of  stock 
would  not  be  to  your  place  unless  corresponding  benefits  are  given 
at  other  places. 

Mr.  Sullivan.  You  see  all  the  benefits  we  are  talking  about  must 
to  some  extent  give  way  to  price.  Price  is  regulated  very  largely  by 
freight  rates.  There  is  a natural  territory  tributory  to  South  St. 
Paul.  Then  there  is  a certain  territory  where  price  prohibits  ship- 
ment there.  If  there  is  not  much  difference  they  might  ship  to  our 
market,  but  if  there  is  much  difference  in  the  freight  rate  that  would 
prohibit  it.  _ . 

Mr.  Riddick.  Is  there  a very  considerable  territory  from  which 
stockmen  sometimes  ship  to  one  market  and  sometimes  to  another  ? 

Mr.  Sullivan.  As  Mr.  Wells  has  stated,  there  has  been  a very 
large  increase  in  the  number  of  stock  shipped  to  South  St.  Paul. 
I suppose  it  is  because  of  the  conditions  existing  there.  However, 
I am  only  a member  of  the  Legislature  of  Minnesota,  and  came  to 
talk  to  you  about  this  legislation,  the  way  it  was  enacted.  And  this 
legislation  was  enacted  at  the  request  of  the  farmers  and  shippers  of 
Minnesota,  who  are  very  much  pleased  with  it  and  do  not  want  any 
Federal  legislation  that  will  deprive  them  of  the  benefits  they  know 
about  now  in  return  for  a rainbow  of  promises  from  which  they  may 
get  no  benefits — Federal  regulation.  We  would  rather  have  what 
we  are  sure  of  than  to  trade  it  for  something  we  are  not  sure  of. 

Mr.  Tincher.  Of  course  there  are  47  other  States  in  the  Union 
i that  are  to  be  considered. 

Mr.  Sullivan.  Very  well,  I think  this  amendment  is  so  worded 
[ that  you  can  regulate  the  stockyards  all  you  want  to  in  other  States, 

; but  please  let  us  regulate  our  own  stockyards.  Mr.  Anderson  did 
not  think  there  was  any  difficulty  about  that  matter,  and  he  is  familiar 
! with  the  bill. 

Mr.  Tincher.  I am  just  wondering  if  some  State  were  to  pass 
some  legislation,  like  your  grain  bill,  that  was  not  satisfactory  to  the 
people,  and  had  a joker  in  it,  if  the  Federal  Government  should  let  it 
go.  Or,  to  go  further,  suppose  some  stockyard  company  could 
control  some  legislature  of  its  State  instead  of  the  people,  and  that 
legislature  should  pass  a regulation  regulating  the  stockyards  in  a 
way  that  was  unsatisfactory  to  the  people,  what  about  that  ? 

Mr.  Sullivan.  Let  me  answer  your  question  by  reading  the 
amendment  proposed  rather  than  in  any  other  way.  This  proposed 


52 


MEAT  PACKER. 


amendment  contains  a proviso,  and  Representative  Anderson 
drew  it: 

Provided , That  this  section  shall  not  be  held  to  limit  the  application  of  Title  III  to 
any  stockyard  owner,  market  agency  or  dealer  in  respect  to  any  matter  of  regulation 
not  within  the  authority  of  such  agency. 

I think  it  is  the  design  of  the  language,  even  if  it  has  not  been 
carried  out  by  the  words  thereof,  that  no  phony  regulation  bill  could 
prevent  the  exercise  of  the  jurisdiction  of  the  United  States  under 
this  particular  bill. 

Mr.  Tincher.  I take  it  the  confidence  you  have  in  the  regulation 
of  your  stockyards  by  law  is  improved  by  the  fact  that  you  have 
good  regulation  at  home,  and,  further,  that  as  to  this  class  of  legisla- 
tion you  would  highly  recommend  it  to  any  legislative  body. 

Mr.  Sullivan.  I certainly  would.  I will  say,  more  than  that,  of 
course  there  is  no  doubt  in  the  world,  and  I think  the  gentlemen  of 
the  committee  will  agree  with  me,  that  we  placed  the  administration 
of  this  law  in  the  hands  of  a gentleman  like  Mr.  Wells,  who  had  had 
many  years’  experience  with  farmers  and  also  with  legislators  and 
public  men,  who  understood  how  to  handle  these  matters,  a man  of 
great  tact,  is  a reason  why  we  were  correspondingly  successful  in  the 
actual  carrying  out  of  the  law. 

In  a Federal  proposition  we  frequently  get  men  from  Georgia  to  « 
come  up  and  try  to  do  something  in  Minnesota  or  vice  versa.  I do  » 
not  particularly  say  from  Georgia,  but  I will  use  that  as  an  illustra- 
tion. A man  might  be  sent  up  from  Texas  just  as  well.  But  our  ] 
law  is  executed  by  men  who  live  right  there,  who  understand  the  < 
business  and  understand  our  prople  and  their  problems  and  who 
understand  how  to  get  at  the  solution  of  those  problems;  and,  : 
furthermore,  our  legislature  is  near  at  hand  and  is  responsible  to  the 
local  demands  of  the  people. 

Mr.  Purnell.  I might  remind  you  that  of  course  there  is  less  \ 
probability  of  somebody  from  Texas  or  Georgia  regulating  your  ? 
affairs  in  the  next  few  years  than  there  was  in  the  past.  ) 

Mr.  Sullivan.  It  has  been  so  proclaimed,  but  I do  not  know  any-  • 
thing  about  performance.  You  know  I am  from  Missouri  on  some  j 
things. 

Mr.  Chairman  and  gentlemen  of  the  committee,  I am  very  much 
obliged  to  you. 

The  Chairman.  And  the  committee  wishes  to  thank  you  for  the 
information  you  have  given. 

The  committee  will  now  stand  adjourned  until  10  o’clock  to-morrow 
morning,  except  for  the  hearing  to  be  given  to  the  Secretary  of  Agri- 
culture at  7 o’clock  this  evening  on  grain  futures. 

Mr.  Veeder.  Mr.  Chairman,  as  I understand  the  situation,  the  pro- 
ponents of  this  bill  were  to  have  to-day  and  to-morrow  and  Friday 
afternoon,  and  the  opponents  were  to  have  Wednesday  and  Thursday 
and  Friday  morning.  Will  this  adjournment  affect  our  time? 

The  Chairman.  No,  sir.  You  will  still  have  Wednesday  and 
Thursday  and  Friday  forenoon. 

Mr.  Veeder.  I thank  you. 

(Thereupon  at  1 o’clock  and  10  minutes  p.  m.  the  committee  ad- 
journed until  to-morrow,  Tuesday,  May  3,  1921,  at  10  o’clock  a.  m.) 


MEAT  PACKER, 


Committee  on  Agriculture, 

House  of  Representatives, 

Tuesday , May  3,  1921. 

The  committee  met  at  10  o’clock  a.  m.,  Hon.  Gilbert  N.  Haugen 
(chairman),  presiding. 

There  were  present:  Mr.  Haugen,  Mr.  Purnell,  Mr.  Voigt,  Mr. 
McLaughlin  of  Nebraska,  Mr.  Riddick,  Mr.  Tincher,  Mr.  Williams, 
Mr.  Sinclair,  Mr.  Hays,  Mr.  Thompson,  Mr.  Gernerd,  Mr.  Clague, 
Mr.  Clarke,  Mr.  Aswell,  Mr.  Kincheloe,  Mr.  Jones,  and  Mr.  Ten  Eyck. 

The  Chairman.  We  will  hear  from  Mrs.  Costigan  first  this  morn- 
ing, if  she  is  ready  to  proceed. 

STATEMENT  OF  MRS.  EDWARD  P.  COSTIGAN,  REPRESENT- 
ING THE  NATIONAL  LEAGUE  OF  WOMEN  VOTERS, 

WASHINGTON,  D.  C. 

Mrs.  Costigan.  Mr.  Chairman  and  members  of  the  committee,  I 
have  no  intention  this  morning  of  discussing  the  merits  of  the  different 
bills  before  you  or  of  going  into  the  need  for  this  legislation, 
but  I want  to  bring  to  the  attention  of  this  committee  in  this 
Congress  what  we  iiave  brought  to  the  attention  of  other  com- 
mittees in  other  sessions — that  large  organizations  of  women  are 
enthusiastically  supporting  Federal  legislation  for  the  regulation  of 
the  meat-packing  industry.  Among  these  ^organizations  is  the 
National  Consumers’  League,  of  which  Mrs.  Florence  Kelley  is  the 
general  secretary.  Mrs.  Kelley  is  here  to  represent  the  National 
Consumers’  League.  Other  organizations  supporting  this  legisla- 
tion are  the  Womens’  Trade  Union  League  and  the  Women’s  Chris- 
tian Temperance  Union.  I represent  here  to-day  the  National 
League  of  Women  Voters. 

For  two  years  and  more  the  National  League  of  Women  Voters  has 
been  supporting  legislation  looking  toward  Government  regulation 
of  the  meat-packing  industry.  We  include  in  our  indorsement 
the  separation  of  the  stockyards  from  the  control  of  the  packers,  the 
making  of  refrigerator  and  special-equipment  cars  part  of  the  com- 
mon-carrier system  of  the  country,  and  the  assuring  properly  regu- 
lated live-stock  and  other  food  markets  open  alike  to  producers  and 
consumers.  We  are  anxious  that  there  shall  be  some  governmental 
agency  specially  delegated  to  investigate  and  supervise  this^  very 
important  industry  that  has  become  so  large  that  it  is  affected 
with  a public  use.  We  are  particularly  anxious  that  there  shall 
be  a strong  publicity  department,  so  that  the  producers  and  the 
consumers  will  know,  as  they  have  a right  to  know,  the  conditions 

53 


54 


MEAT  PACKER. 


that  surround  this  highly-important  industry,  particularly  relating 
to  the  supply,  demand,  and  price  conditions. 

We  feel  that  public  opinion  is  back  of  this  legislation  and  the 
public  should  know  what  the  facts  are.  We  are  therefore  anxious  for 
a strong  publicity  department. 

I have  come  this  morning  particularly  to  bring  the  latest  indorse- 
ment of  the  National  League  of  Women  Voters.  In  the  annual  con- 
vention which  met  in  Cleveland  from  April  11  to  April  16,  the  food 
supply  and  demand  committee  presented  recommendations  which  ' 
were  overwhelmingly  adopted  by  the  whole  convention  representing 
the  women  from  all  the  States  in  the  Union.  These  recommenda- 
tions, as  adopted,  are  as  follows : 

The  food  supply  and  demand  committee,  as  a result  of  its  investigations,  is  con- 
vinced— 

That  the  high  cost  of  living  is  in  large  measure  caused  by  unorganized  and  wasteful 
methods  in  the  distribution  and  use  of  food; 

That  unfair  manipulation  and  private  control  by  large  food  organizations  and 
combinations  of  markets  and  the  facilities  for  trade  and  distribution  are  discouraging 
production  and  increasing  prices  to  consumers;  and 

That  our  Nation  is  morally  obligated  to  make  it  possible  for  nourishing  food  to  be 
brought  and  kept  within  reach  of  every  home  and  especially  all  growing  children. 

Therefore  the  committee  recommends:  The  continued  indorsement  of  prompt  and  • 
effective  legislation  by  Congress  providing  Federal  regulation  for  the  meat-packing 
industry. 

Mr.  Chairman,  I have  come  to  assure  this  committee  of  the  support 
of  many,  many  thousands  of  women  of  effective  legislation  to  regu- 
late the  meat-packing  industry,  and  to  express  the  hope  that  this 
committee  will  very  speedily  report  out  some  such  bill  to  Congress.  ? 

I thank  you,  Mr.  Chairman.  5 

The  Chairman.  We  thank  you  very  much,  Mrs.  Costigan.  We  will 
hear  Mrs.  Kelley  next. 

STATEMENT  OF  MRS.  FLORENCE  KELLEY,  GENERAL  SEC- 
RETARY NATIONAL  CONSUMERS’  LEAGUE,  NEW  YORK 

CITY. 

Mrs.  Kelley.  Mr.  Chairman,  my  name  is  Mrs.  Florence  Kelley,; 
and  I come  here  from  New  York  City.  I am  the  general  secretary  ; 
and  have  been  for  more  than  20  years,  of  the  National  Consumers’ 
League,  of  which  the  former  Secretary  of  War,  Mr.  Newton  D.  Baker, 
has  for  five  years  been  president. 

At  our  annual  meeting  in  1919  we  adopted  a 10-year  program. 
Before  that  we  had  worked  for  10  years  with  growing  success  to 
obtain  in  the  States  commissions  known  as  minimum-wage  com- 
missions or  as  divisions  under  the  industrial  welfare  commissions  of 
the  different  States  which  should  establish  rates  of  wages  such  that 
women  and  minors  who  worked  for  their  living  could  be  assured  a 
wage  that  would  “maintain  them  in  health.”  That  is  the  wording 
of  the  bill  which  Congress  passed  and  which  is  in  force  here  in  the 
District  of  Columbia  at  the  present  time. 

There  are  now  10  of  those  commissions  at  work,  and  we  have  found, 
as  one  after  another  of  them  has  set  up  one  wage  rate  after  another 
intended  to  enable  the  people  who  work  in  the  humblest  occupations 
to  live  while  they  worked  without  having  recourse  to  charity  while 
they  worked,  that  the  cost  of  living  arose  so  that  apparently  the 


MEAT  PACKER. 


55 


gains  which  were  nominally  made  for  the  workers  really  accrued  to 
the  distributors  of  food  and  to  the  sellers  of  shoddy  clothing  and  to 
the  housing  profiteers.  It  was  rather  in  the  nature  of  kitty  chasing 
her  tail  for  the  Consumers’  League  to  spend  so  large  a part  of  its  time 
getting  minimum  wage  rates  established,  only  to  have  this  unfore- 
seen result. 

Therefore,  in  1919,  we  adopted,  as  a part  of  our  10-year  program, 
the  effort  to  get  goods,  textiles,  etc.,  branded,  so  that  the  people 
might  know  what  they  were  paying  for  out  of  their  wages,  and  to 
promote  and  cooperate  with  all  those  who  were  striving  to  promote 
regulation  of  the  great  organized  producers  and  distributors  of  foods, 
and  also  to  cooperate  with  the  people  who  were  promoting  coopera- 
tion in  the  distribution  of  foods  by  wholesale  and  retail. 

A year  and  a half  of  that  10-year  period  has  now  passed  and  we 
have  undergone  some  experiences  and  have  made  some  observa- 
tions which  can  not  fail,  I think,  to  be  of  interest  to  the  members 
of  this  committee.  The  principle  we  adopted  underlying  our  10 
years’  activity  was  this,  that  the  banks  have  by  no  means  been 
put  out  of  business  by  the  creation  of  the  Federal  Reserve  Board. 
On  the  contrary,  both  the  public  and  the  banks  have  profited  by 
having  that  valuable,  new  organization  within  the  Government  at 
work  in  this  crucial  time  of  reorganization.  Very  few  people,  we 
believe,  seriously  would  consider  it  desirable  that  the  Interstate 
Commerce  Commission  should  be  done  away  with,  although,  as  Mr. 
Anderson  showed  yesterday,  owing  to  the  legislation  under  which 
it  has  had  to  function,  it  has  not  given  entire  satisfaction,  perhaps, 
to  any  great  part  of  the  public.  Still,  we  all  recognize  that  so  long 
as  railroads  are  administered  as  they  are  in  this  country  by  private 
capital,  there  has  to  be  regulation  and  there  has  to  be  a responsible 
organization  within  the  Federal  Government  charged  with  the  duty 
of  regulation  under  the  laws  of  Congress. 

When  any  large  industry  is  so  great  and  so  firmly  organized  that 
it  can  produce  such  results  as  we  constantly  see  produced  within 
the  meat  industry,  we  can  not  see  why  that  great  industry  should 
continue  to  play  the  role  of  Robin  Hood  and  be  without  the  law. 

We  do  not  want  to  put  the  food  industry  out  of  business.  That 
is  too  preposterous  even  to  suggest,  but  we  do  believe  that  the  present 
situation  is  an  entirely  untenable  one. 

I have  lived  for  about  30  years  among  very  poor,  working  people, 
first  on  the  west  side  of  Chicago,  and  now  for  more  than  20  years, 
on  the  lower  east  side  in  New  York.  Last  year,  for  the  first  time, 
the  greatest  and  richest  city  in  the  Western  Hemisphere  created,  by 
vote  of  its  city  government,  a fund  to  pay  for  nourishing  foods,  of 
which  meat  should  be  a considerable  element,  to  be  given  to  the 
public-school  children,  in  order  that  they  might  be  enabled  to  do  the 
work  which  the  city  compels  them  to  do  in  the  schools  which  it 
compels  them  to  attend. 

It  was  found  that  very  large  numbers  of  school  children  in  New 
York  and  in  Chicago,  and  in  other  cities,  were  compelled  to  go  to 
school,  compelled  to  complete  a curriculum,  and  they  can  not  leave 
school  until  they  do  complete  that  curriculum,  and  yet  they  were 
found  by  the  city  physicians  to  be  incompetent  from  lack  of  proper 
nourishment  to  do  the  work  that  the  law  requires  them  to  do.  So 


56 


MEAT  PACKER. 


New  York  City,  for  the  first  time,  since  white  people  occupied  Man- 
hattan Island,  voted  money  to  be  spent  in  the  five  boroughs  for  the 
nourishment  of  the  school  children  in  the  schools. 

We  have  had  volunteer  societies  doing  that  work  increasingly  ever 
since  Robert  Hunter’s  book  appeared  15  years  or  more  ago,  a book 
that  was  almost  laughed  off  the  publisher’s  shelves  because  of  his 
statements  about  the  insufficient  feeding  of  public-school  children 
increasing  at  such  a rate  as  largely  to  frustrate  the  intent  of  Ameri- 
canizing the  foreign  children  and  feeding  our  own  native-born  chil- 
dren, and  training  them  to  be  intelligent  and  adequate  citizens  of 
this  country.  This,  of  course,  is  peculiarly  true  of  the  children  of 
the  unskilled  workers. 

It  has  been  a very  long  time — it  seems  to  me  it  must  have  been 
40  years — since  the  English  people,  recognizing  that  the  poor  were 
always  with  them  and  that  pauperism  was  always  with  them  in 
London,  arranged  first  for  charity  luncheons,  and  then,  perhaps  20 
years  ago,  arranged  for  an  expenditure  of  the  public  funds  for  feeding 
English-born  children  in  the  public  schools  in  order  that  they  might 
do  the  school  work  which  the  law  required  them  to  do. 

We,  however,  regarded  that  as  a kind  of  hereditary  curse  of  pauper- 
ism since  the  days,  perhaps,  of  Elizabeth  in  England,  and  no  one  was 
willing,  15  years  ago,  to  consider  for  a moment,  in  NewT  York,  Robert 
Hunter’s  proposal  that  a regular  part  of  the  expenditure  of  the  educa- 
tional funds  of  the  city  of  New  York  should  go  for  the  nourishment  of 
the  children. 

Now,  at  the  end  of  about  15  years,  I think  it  is,  we  are  doing  just 
that.  We  are  appropriating  sums  of  money  from  the  public  treasury 
in  order  that  our  children  shall  not  continue  to  faint  in  the  classrooms; 
in  order  that  they  shall  not  fall  out  of  school  ill,  suffering  from  a 
disease  which  is  now  regularly  recognized  by  the  medical  profession 
as  the  forerunner  of  tuberculosis,  and,  of  course,  the  forerunner  of 
failure  in  school,  a disease  which  is  regularly  recognized  by  symptoms 
of  anemia  and  other  symptoms,  such  as  a predisposition  to  fainting 
when  making  the  slightest  exertion — the  disease  of  malnutrition. 

We  now  have  nutrition  classes  in  the  schools,  and,  moreover,  we 
have  an  entirely  new  expenditure  of  public  funds,  a thing  undreamed 
of  in  the  past. 

The  city  of  New  York,  the  city  of  Boston,  the  city  of  Chicago,  and 
I do  not  know  how  many  other  cities,  because  every  day  the  list 
lengthens,  pay  salaries  out  of  the  public  funds  to  city  dietitians. 
The  funds  may  be  administered  by  the  county  poor  authorities; 
they  may  be  administered  by  the  juvenile  courts,  as  sometimes  they 
are;  they  may  be  administered  by  the  educational  authorities  or  by 
the  health  authorities,  but  whatever  the  organ  through  which  they 
are  paid,  they  are  always  paid  out  of  the  public  funds  and  are  paid 
to  teach  mothers  how  to  feed  the  children  in  the  homes  sufficiently, 
with  decreasing  supplies  of  meat;  and  how  to  use  substitutes  for 
meats,  to  enable  their  children  to  go  to  school,  which  they  must  do, 
and  learn  lessons,  which  they  must  learn,  and  which  they  can  not 
learn  on  the  present  rations,  unless  their  mothers  are  taught  to  cook 
differently,  to  arrange  the  diets  differently,  so  that  they  can  get 
other  things  to  take  the  place  of  meat,  which  the  mothers  in  the 
families  of  unskilled  workers  can  not  afford  to  buy  at  the  present 
prices. 


MEAT  PACKER. 


57 


Occasionally,  a packer  says  to  me — I see  a good  deal  of  the  agents 
)f  the  packers  in  the  course  of  my  travels.  They  come  to  see  me 
ind  I meet  them  at  the  meetings  of  the  League  of  Women  Voters 
vhich  they  regularly  frequent,  and  they  come  to  our  meetings  and 
diey  all  say,  11  Is  not  this  failure  to  feed  the  children  due  to  the  lack  of 
jkill  of  the  mothers  ? ;;  Of  course,  we  have  had  mothers  in  this  country 
iver  since  we  have  had  any  population  in  this  country,  and  it  is  a 
Derfectly  new  failure  of  the  mothers  that  they  send  children  to 
school  fed  on  bread  and  tea  or  on  bread  and  coffee.  Until  the  pro- 
libition  act  came  in,  the  Italians  used  to  send  the  children,  if  the 
’ather  kept  a little  saloon,  in  quite  considerable  numbers  from  my 
>wn  neighborhood  so  stupid  that  they  would  hardly  reach  their 
lesks  before  they  would  put  their  heads  down  on  them  and  go 
mshakably  asleep,  because  their  breakfast  had  been  a crust  of  hard, 
[talian  bread,  dipped  in  whatever  remnants  were  left  in  the  glasses 
;he  night  before. 

It  is  quite  a new  thing  for  American  mothers  to  be  so  incompetent 
n the  management  of  food  that  they  have  to  have  die  tit  ans  sent 
;0  them  to  enable  their  children  to  keep  up  in  school.  The  fault  is 
lot  with  the  mothers.  It  would  not  matter  what  a genius  you  were, 
f you  had  the  falling  wage  of  last  year  and  this  year,  and  the  prices 
;0  pay  for  meat  that  they  have  to  pay  in  the  poor  little  shops  m the 
listricts  where  the  great  masses  of  unskilled  workers  live,  no  genius 
vould  enable  you  adequately  to  feed  your  children  on  the  stuff  you 
mild  buy;  and  for  that  reason,  we  have  the  supplementary  meals 
growing  and  spreading  all  over  the  country.  Instead  of  having  such 
liscussions  laughed  at  as  the  folly  of  a light-headed  man,  as  they 
vere  15  years  ago,  this  is  now  an  established  part  of  the  work  of  the 
nunicipalities  to  eke  out  the  insufficient  food  of  the  oncoming 
generation. 

I talk  whereof  I know,  because  I have  lived  among  the  unskilled 
porkers  since  1892,  and  I have  seen  the  falling  standard  of  food  in  the 
lamilies,  and  I have  seen  the  means  that  the  cities  have  taken  to  cope 
yith  that. 

The  Consumers  League  began  the  effort  to  get  regulation,  of  the 
ood  industry,  meaning  thereby  primarily  the  meat  industry,  and 
ve  did  it,  animated  first  by  the  delay  in  getting  minimum  wage 
egislation  really  to  assure  the  health  and  modest  comfort  of  the 
people  for  whom  it  is  provided  by  the  legislatures  of  the  different 
lltates  and  by  the  Congress;  but  also  animated  by  this  quite  in- 
lolerable  spectacle  of  the  falling  standard  of  vitality  of  the  children 
f the  unskilled  workers  in  the  industrial  centers. 

Now,  that  is  our  position.  If  the  American  people  are  agreed,  and 
hey  seem  to  be  agreed,  that  it  is  a good  thing  to  have  a Federal 
Reserve  Board  to  stabilize  the  banking  industry,  and  if  we  agree  with 
lr.  Anderson  in  what  he  said  yesterday,  that  although  not  the  whole 
anerican  people  have  been  at  all  times  satisfied  with  the  functioning 
f the  Interstate  Commerce  Commission,  still  no  one  wishes  to 
bandon  the  attempt  to  get  rational  and  adequate  regulation  of 
ransportation  facilities  and  transportation  rates,  we  believe,  and  we 
re  a part  of  that  rapidly  growing  national  organization  of  women 
dio  believe  that  there  must  be  in  the  very  near  future  adequate  regu- 
ition  provided  by  Congress  through  some  one  or  some  combination 


58 


MEAT  PACKER. 


of  these  bills  which  are  before  you  to  stop  this  tendency  toward  the 
deterioration  of  the  American  children,  and,  of  course,  the  wives  and 
husbands  themselves,  with  their  falling  wages  and  with  the  high  cost 
of  living  which  is  still  developing. 

That  is  the  situation  and  that  is  the  campaign  on  which  we  have 
enlisted.  We  shall  appear  before  you  just  as  many  times  and  just  as 
many  years  as  may  be  necessary,  and  we  shall  not  only  appear  before 
you  here  but  we  are  appearing  all  over  the  United  States. 

The  American  women  are  a great  deal  more  intelligent  than  indus- 
* try  gives  them  credit  for  being.  We  are  a great  deal  more  disci- 
plined in  working  together.  From  the  days  when  women  began  to 
have  missionary  societies  back  in  the  twenties  and  thirties,  through 
all  the  70  years  of  struggle  to  get  the  amendment  to  the  Constitution 
giving  us  votes,  we  have  been  learning  to  work  together,  as  probably 
the  women  of  no  other  nation  on  the  globe  ever  were  disciplined  in 
working  together,  and  until  last  fall  an  enormous  part  of  the  organ- 
ized energy  of  women,  far  more  than  Congress  ever  realized,  had  been 
given  to  a campaign,  educational  and  political,  for  getting  votes  for 
women. 

Now,  all  that  energy  is  released.  We  have  the  votes  and  we  are 
now  organized  with  a thousand  ramifications.  We  have  more  inter- 
locking directorates  than  business  has. 

Mrs.  Costigan,  who  represents  the  League  of  Women  Voters,  is 
vice  president  of  the  National  Consumers  League.  I represent  the 
National  Consumers  League  and  am  an  officer,  perhaps  only  in  a 
rather  detached  or  honorary  way,  but  still  an  officer  in  a considerable  ? 
number  of  organizations,  and  if  you  should  institute  an  investiga- 
tion of  the  activities  of  women,  I think  you  would  be  surprised  to 
find  the  thoroughness  with  which  it  is  possible  now,  when  we  no  longer 
have  to  struggle  for  votes,  to  deal  with  any  subject  which  presents 
itself. 

This  subject  presents  itself  to  the  mothers  of  the  United  States.  * 
It  is  not  only  the  unskilled  worker  in  the  city  who  feels  this  pinch  j 
but  also  the  wives  of  the  high-school  teachers,  the  wives  of  the  pro- 
fessors in  the  fresh-water  colleges,  the  wives  of  the  ill-paid  clerks,  and  • 
the  tempted  bank  cashiers,  and  all  of  the  people  who  value  respecta-  ; 
bility  so  that  they  take  small  salaries  for  the  sake  of  having  occupa- 
tions to  which  respectability  attaches.  None  of  them  like  the  basis 
on  which  they  have  to  keep  house  now,  and  their  intelligence  is  avail- 
able and  is  enlisted  for  keeps  in  this  campaign  for  the  control  of  food 
sources. 

So  much  for  the  people  who  are  our  new  backers. 

My  father  was  for  30  years  in  the  House  of  Representatives.  He 
died  in  1890.  During  a large  part  of  the  time  he  was  in  the  House, 
from  1870  to  1890,  the  question  of  the  incipient  trusts  was  before 
Congress.  It  was  a source  of  great  excitement  to  the  Congress  for 
those  20  years,  from  1870  to  1890.  My  father  was  here  from  1860 
to  1890.  I heard  a great  deal  in  those  days  about  what  would  happen 
when  the  things  which  were  then  just  beginning  came  to  full  growth 
and  fruition.  This  subject  has  never  been  wholly  absent  from  my 
mind;  but  there  are  aspects  of  the  present  relation  of  this  particular 
industry  to  the  life  of  the  country,  aside  from  the  matter  specifically 
of  food,  which  can,  I think,  not  fail  of  interest  to  this  committee. 


MEAT  PACKER. 


59 


For  instance,  Mr.  Anderson  spoke  yesterday  of  the  good-will  adver- 
tising which  had  been  carried  on  in  relation  to  the  producers  of  food. 

There  has  been  an  astonishing  campaign.  I do  not  know  that 
we  could  call  it  exactly  a good-will  campaign.  I think  it  has  been 
addressed  not  altogether  to  the  good  will  of  the  public,  but,  perhaps, 
in  part  to  their  cupidity.  There  has  been  an  inordinate  and  immense 
campaign  carried  on  throughout  the  press,  first  pointing  out  how 
trivial  are  the  profits  of  the  packers  but  then  also,  simultaneously, 
and  very  confusingly  to  the  women  investors,  who  are  rather  new- 
worn  en  investors  are  now  an  established  part  of  the  investing  public. 
They  are  very  critical  and  very  eager  to  learn  and  very  eager  to  find 
! out  about  trustworthy  investments,  and  it  puzzles  them  very  much 
! to  read  in  the  papers — this  campaign  has  fallen  off  just  a little  just 
! recently — about  the  trivial  profits  of  the  packers  and  then  to  receive 
by  mail  offers  of  bonds  and  stocks  with  the  most  gratifying  profits. 

I should  think  that  men  so  astute  as  those  who  conduct  the  pack- 
ing industry  would  have  seen  how  confusing  that  might  be  to  new 
investors.  I dare  say  that  men  who  have  been  investors  for  all  the 
I years  since  1870  understand  those  conflicts  of  statements,  but  we 
! do  not.  We  are  puzzled  by  them,  and  we  are  also  struck  by  this 
coincidence,  that  the  more  they  advertise,  the  less  news  we  receive 
of  hearings  like  this.  I live  in  New  York  and  I read  the  metropolitan 
press.  Members  of  our  organization  live  all  over  the  country  and 
read  the  local  press,  but  the  experience  of  all  of  us  is  identical.  Un- 
less we  come  to  the  hearing  we  know  almost  nothing  about  it.  Of 
course,  we  can  read  the  evidence,  as  it  piles  up  and  piles  up,  but  it  is 
not  easy  always  to  get  that  promptly.  The  publication  lags,  and 
unless  people  have  a really  scientific  interest  in  knowing  what  is 
going  on  here,  and  unless  they  are  perfectly  undiscouraged  by  the 
slowness  of  the  process  of  getting  any  results  as  to  what  is  going  on 
here,  they  do  get  discouraged  at  being  unable  to  find  any  news  in  the 
press.  We  can  read  about  the  Sheppard-Towner  bill  and  we  can 
read  about  Mr.  Rogers’s  bill  against  misbranding  and  we  can  read 
eternally  about  bills  which  do  not  interest  us  at  all;  columns  and 
columns  about  bills  which  do  not  interest  us,  but  about  these  bills 
i we  have  great  difficulty  in  finding  out  anything  at  all.  I think  more 
women  are  interested  in  this  general  legislation  that  has  been  going 
on  so  long  than  anything  else  except  the  Sheppard-Towner  bill,  and 
yet  it  is  harder  to  learn  about  this  than  it  is  about  anything  else. 

I should  think  it  would  be  of  great  interest  to  this  committee  to 
know  why  it  is  that  its  proceedings  are  given  so  little  publicity  in 
relation  to  their  very  great  importance.  . 

Mr.  Aswell.  Would  you  suggest  to  the  committee  why  it  is  the 
public  does  not  know  anything  about  these  matters  ? 

Mrs.  Kelley.  Yes;  I think  there  is  a very  close  coincidence  be- 
tween the  good-will  campaign  of  publicity  and  these  confusing 
campaigns  which  are  addressed  to  the  public  through  the  press  and 
the  singular  absence  of  information  about  the  proceedings  of  this 
committee.  . 

Mr.  Aswell.  You  think  the  packers  keep  this  from  the  publics 

Mrs.  Kelley.  No;  I do  not  think  the  packers  keep  this  from  the 
public  at  all.  I do  not  think  they  have  to. 

Mr.  Aswell.  Do  you  think  the  press  does  that? 


60 


MEAT  PACKER. 


Mrs.  Kelley.  Well,  you  only  have  to  read  the  press  and  arrive  at 
your  own  conclusion.  You  see  we  are  new  at  this  game  and  we  may 
be  drawing  wrong  conclusions 

Mr.  Aswell.  I am  trying  to  find  out  who  is  responsible. 

Mrs.  Kelley  (continuing).  But  there  seem  to  be  quite  startling 
coincidences. 

Mr.  Tincher.  You  mean  that  if  a country  paper  is  carrying  a 
half  page  good-will  advertisement  they  have  not  much  room  for  news 
about  what  is  going  on  about  these  matters  % 

Mrs.  Kelley.  Our  constituency  is  rather  urban.  I think  Mrs. 
Costigan’s  is  more  comprehensive,  but  my  constituency  is  rather 
urban  and  I was  speaking  of  the  urban  papers,  from  the  metropolitan 
papers  down  to  those  of  the  communities  where  the  fresh-water 
colleges  are  located,  and  if  you  would  make  a collection  of  those  and 
have  them  clipped  for  information  about  the  evidence  given  at  the 
hearings  of  this  committee  and  then  have  all  the  advertising  clipped, 
and  keep  them  in  volumes  side  by  side,  I think  you  would  find  a 
very  interesting  oscillation  of  the  scales.  I may  be  wrong  about 
that,  but  I think  you  would. 

Now,  there  is  a more  intimate  experience  that  my  organization  has 
had  which,  if  the  chairman  thinks  perhaps  borders  on  the  nature  of  < 
gossip  he  will,  I am  sure,  not  let  me  take  your  time  unworthily;  but  ; 
I appeared  before  congressional  committees  a couple  of  years  ago  and  . 
then  we  adopted  this  10-year  program  at  our  annual  meeting,  and 
we  have  had  a great  deal  to  do  in  the  way  of  having  speakers  before  ! 
forums  discussing  the  cost  of  living.  We  have  been  fairly  active  * 
with  regard  to  the  price  of  meat.  Among  other  things,  we  had  a 
good  many  articles  prepared  concerning  cooperation  and  the  need  of 
municipal  slaughterhouses  and  municipal  markets,  but  particularly 
the  need  of  developing  cooperative  distribution  of  foods  and  other 
essentials  through  the  cooperative  movement  which  imitated  the 
Swiss  cooperative  distribution  of  food.  The  children  of  the  Swiss 
cooperators  all  through  the  war  could  get  milk  in  great  abundance. 

It  is  the  poor  who  are  the  cooperators,  and  the  children  of  the  Swiss 
poor  in  Zurich,  Geneva,  and  in  all  their  industrial  centers,  had  all  the 
milk  that  the  children  needed.  They  got  it  through  their  coopera- 
tively owned  herds  and  through  their  cooperatively  owned  dairies. 
The  same  thing  was  true  of  the  children  of  the  cooperators  in  England. 
They  lacked  other  foods,  but  they  did  not  lack  the  milk,  because  that 
was  produced  by  their  cooperatively  owned  herds. 

So  we  thought  that  was  a good  thing  to  copy  and  we  had  a good 
many  articles  about  cooperation  prepared,  but  a very  singular  thing 
has  happened. 

There  is  a series  of  periodicals  that  go  out  to  women,  the  Pictorial 
Review,  the  Ladies  Home  Journal,  the  Woman’s  Home  Companion, 
Good  Plousekeeping,  Vogue,  and  a very  long  list.  They  have  an 
enormous  circulation.  It  is  said  that  even  the  husbands  and  fathers 
of  the  women  who  buy  them  sometimes  read  them. 

Now,  those  periodicals  have  had  a terrific  boom  in  advertising. 
Since  the  beginning  of  the  war  their  advertising  has  grown  and  grown 
and  grown,  but  you  can  not  get  a carefully  written  article  about 
cooperation  inio  one  of  them;  not  one.  They  will  not  tell  you  why 
they  will  not  take  them.  They  will  not  say  that  the  public  is  not 


MEAT  PACKER. 


61 


interested  in  them  but  they  just  do  not  carry  them.  If  you  would 
have  all  those  periodicals  clipped  for  articles  about  cooperation  and 
compared  those  articles  with  the  advertising,  if  you  will  put  coopera- 
tion in  one  set  of  clipping  books  and  advertising  in  another  set  of 
clipping  books,  I think  you  would  find  the  scales  acting  pretty  much 
as  they  would  in  the  case  I mentioned  a while  ago.  We  can  not  get 
those  things  discussed.  As  I said  a few  moments  ago,  I gave  evidence 
before  this  committee  and  the  Senate  committee  a couple  of  years  ago, 
and  we  have  had  a good  deal  of  publicity  carried  on  by  the  kind  of 
hand  and  mouth  way  that  you  have  got  to  have  it  carried  on  now, 
because  now  you  have  to  go  and  lecture 

Mr.  Voigt  (interposing).  It  might  be  a good  idea  for  the  women  to 
publish  a cooperative  magazine  of  their  own. 

Mrs.  Kelley.  There  are  a great  many  difficulties  about  that. 
There  is  the  paper  difficulty  and  there  are  a great  many  other  diffi- 
culties about  doing  that.  It  is  much  better  economy  to  get  all  the 
subjects  that  you  want  to  read  about  in  the  papers  that  you  buy  for 
a variety  of  reasons  than  just  for  one  reason.  It  is  better  economy 
to  have  a free  flow  of  news  and  information  in  the  general  things  that 
are  commercially  printed  than  it  is  to  set  up  little  specialized  things 
by  amateurs.  We  have  learned  that;  but  we  have  had  this  very 
interesting  experience:  My  organization,  as  I said,  is  an  old  estab- 
lished organization,  and  one  of  the  first  groups  of  people  who  came 
into  it  were  presidents  and  economists  in  the  leading  universities  and 
colleges,  and  we  have  always  had  branch  leagues  in  the  universities 
and  colleges. 

We  have  30  of  them  now  and  we  should  have  more.  We  have 
also  people  lecturing  on  these  general  subjects  that  I have  been 
speaking  of  in  the  name  of  the  Consumers’  League.  Nearly  all  the 
work  that  is  done  for  the  League  outside  of  a small  central  office,  in 
which  I am  the  oldest  official,  is  done  voluntarily.  For  instance, 
we  enjoyed  for  nine  years  the  gift  of  the  priceless  services  of  Mr.  Jus- 
tice Brandeis  before  he  was  elevated  to  the  bench  in  defending  the 
constitutionality  of  our  minimum-wage  legislation  and  the  minimum 
working-day.  The  economists  have  written  articles  on  the  subject 
of  the  minimum  wage  until  there  is  a whole  literature  on  that  subject, 
but  just  after  our  last  annual  meeting  a new  kind  of  difficulty  arose 
which  we  had  never  encountered  before.  Because  of  the  great 
interest  which  people  began  to  show  in  our  methods  and  inquiries 
we  had  to  expand  our  correspondence  to  include  all  the  subjects 
that  our  members  have  known  very  well  for  the  last  20  years.  That 
is  what  we  were  trying  to  do,  but  suddenly  we  began  to  receive 
letters  from  our  honorary  vice  presidents,  inclosing  letters  addressed 
to  them  from  Mr.  Louis  Swift,  and  all  of  those  letters  were  alike  in 
substance — they  varied  a little  in  form,  but  were  practically  alike  in 
substance — asking  the  presidents  of  the  universities  and  these 
economists  whether,  as  honorary  vice  presidents  of  our  organization, 
they  were  keeping  themselves  as  intimately  informed  as  they  ought 
to  be  with  regard  to  the  activities  of  the  organization  to  which  they 
were  lending  the  use  of  their  names.  One  president  of  a great  uni- 
versity actually  resigned.  That  would  have  been  a great  blow  to 
us  to  have  him  resign,  but  almost  immediately  after  his  term  of 
usefulness  at  his  university  expired.  The  new  president  is  again 


62 


MEAT  PACKER. 


with  us.  Aside  from  that,  the  only  effect  of  Mr.  Swift's  correspond- 
ence was  greatly  to  enhance  the  interest  of  these  officials  in  our 
organization  and  in  our  activities.  They  sent  all  of  these  letters 
either  to  me  or  to  the  Secretary  of  War  with  more  or  less  amusing  a 
comment  or,  in  some  cases,  with  serious  inquiries  as  to  whether  or 
not,  perhaps,  in  these  very  troublous  times  this  was  just  the  moment 
for  the  League  to  embark  upon  so  difficult  a field  as  that  of  keeping  ^ 
the  light  permanently  turned  upon  the  great  massed  industries. 

Mr.  Clarke.  May  I ask  you  a question?  ] 

Mrs.  Kelley.  Certainly.  1 

Mr.  Clarke.  Was  this  Secretary  of  War  Baker? 

Mrs.  Kelley.  Yes,  sir.  The  Secretary  of  War,  Mr.  Baker,  was 
for  five  years  and  is  now  the  president  of  this  organization.  Before 
that  Mr.  John  Graham  Brooks,  of  Cambridge,  was  for  18  years  the 
president. 

Of  course,  we  began  then  to  inquire  into  the  scope  of  this  corre- 
spondence which  Mr.  Swift  was  carrying  on  in  this  way.  He  did  not 
address  any  question  to  the  central  office.  We  not  only  gathered 
in  a very  interesting  volume  of  correspondence  from  these  gentle-, 
men  but  we  also  learned,  to  our  great  surprise,  that  the  most  beautiful 
pamphlets  that  one  can  imagine,  in  the  most  rainbow  colors,  were 
being  sent  to  the  girls'  boarding  schools  in  the  country  with  letters  i 
inquiring  whether  the  students  in  the  boarding  schools  really  felt  that ! 
they  were  able  to  form  an  enlightened  opinion  as  to  the  great  industry. 
They  were  private  boarding  schools  attended  by  girls  between  the) 
ages  of  14  and  18.  We  were  not  trying  to  interest  the  schoolgirls  in 
the  intricacies  of  the  packing  industry  but  in  the  wages  paid  to  the 
girls  of  their  age  who  have  not  the  advantage  of  going  to  boarding 
schools  year  after  year  and  being  cherished  and  educated;  to  interest 
them  in  the  girls  who  spin  the  cloth  in  the  mills  and  do  work  in  the 
stockyards,  some  of  them  sometimes  under  temperatures  that  are  not  { 
always  wholesome,  away  down  below  the  temperature  in  the  boarding  ' 
schools.  \ 

Mr.  Clarke.  Have  you  any  of  those  circulars  ? 

Mrs.  Kelley.  I have  not  any  here.  I can  send  them  to  the  j 
chairman. 

Mr.  Clarke.  I will  be  much  obliged  if  you  will  do  so. 

Mrs.  Kelley.  Very  well;  we  are  quite  rich  in  them.  This  is  the 
final  interesting  postscript.  A leading  periodical,  a weekly  in  New 
York,  published  an  article  on  this  underground  correspondence,  this 
kind  of  correspondence  addressed  to  the  heads  of  universities,  inquir- 
ing of  them  whether  they  were  performing  their  duties  when  they 
enlisted  as  an  honorary  vice  president  of  a semipublic  organization. 
That  struck  some  of  them  very  unfavorably.  It  seemed  to  them 
that  was  the  kind  of  inquiry  that  reflected  on  their  intelligence  and 
on  their  sense  of  responsibility  and  they  did  not  take  them  altogether 
amiably.  They  sent  some  of  them  to  the  editors  of  the  magazines, 
not  necessarily  for  publication,  but  for  the  information  of  the  editors. 
One  editor  receiving  one  of  these  letters  and  some  of  these  pamph- 
lets in  this  way,  published  an  article  which  he  ended  with  these  words : ! 

Mr.  Swift}  is  your  case  so  weak  that  you  have  to  support  it  with  blackjack  propa- 
ganda? 1 !l 


MEAT  PACKER. 


63 


To  the  surprise  of  the  editor,  after  a suitable  period,  he  received  a 
letter  again  signed  by  Louis  F.  Swift,  ending  with  the  words: 

We  do  not  regard  this  as  blackjack  propaganda,  but  the  method  we  have  found  so 
I advantageous  that  we  propose  to  continue  it. 

I do  not  want  to  take  the  time  of  the  committee  for  further  ex- 
position of  the  difficulties  of  publicity  and  the  difficulties  of 
tive  cooperation  in  behalf  of  legislation  like  this  on  the  part  of  the 
! public.  I can  only  say  that  our  organization  has  not  suffered  from 
'this.  We  are  still  at  the  old  place,  doing  business  in  the  same  old 
way,  with  more  members,  a little  more  money,  and  a good  deal 
| more  publicity  than  we  have  had  in  previous  years. 

I think  that  the  committee  is  entitled  to  know  the  difficulties  m 
promoting  this  legislation  that  we  are  confronted  with. 

I thank  you,  gentlemen,  for  listening  to  me  so  patiently. 

The  Chairman.  We  are  very  much  obliged  to  you,  Mrs.  Kelley. 

Mr.  Clarke.  Mrs.  Kelley,  may  I be  permitted  to  ask  you  a ques- 
tion or  two  ? 

Mrs.  Kelley.  I shall  be  delighted. 

Mr.  Clarke.  That  is  fine;  I am  a new  member  of  the  committee. 

What  investigation  has  your  organization  made  as  to  the  cost, 
the  price,  to  the  one  who  distributes  and  to  the  consumer  in  your 
neighborhood;  that  is,  as  to  the  difference  between  the  price  they 
pay  and  what  they  get  for  it  ? 

Mrs.  Kelley.  As  to  what  investigation  we  have  made  as  to  the 
spread  in  price  between  what  the  local  dealers  pay  and  the  price  that 
they  charge  the  local  consumers,  we  are  a voluntary  organization 
and  our  means  are  not  inexhaustible.  So  long  as  Mr.  Palmer  was 
investigating  the  subject  of  profiteering,  we  felt  that  it  was  not  neces- 
sary for  us  to  duplicate  his  labors.  The  whole  question  is  so  elusive 
that  it  seemed  to  us  better  to  leave  those  inquiries  to  Mr.  Palmer 
and  to  this  committee  which  can  always  summon  witnesses  before  it, 
and  to  the  Federal  Trade  Commission.  We  have  a great  deal  to  do 
with  the  Federal  Trade  Commission  in  its  other  lines  of  activity,  aside 
from  meat,  in  keeping  the  light  turned  on  unfair  trade  practices.  We 
are  very  favorably  impressed  with  their  procedure,  with  the  fact  that 
they  are  obliged  to  give  hearings  to  the  people  whom  they  are  inves- 
tigating, and  there  is  an  opportunity  for  the  public  to  attend  those 
hearings,  and  it  has  seemed  to  us  better  to  avail  ourselves  of  the 
opportunities  for  information  which  are  furnished  not  only  by  the 
Federal  Trade  Commission  but  also  by  the  States  and  in  some 
instances  by  the  cities  and  in  some  cases  by  private  organizations. 
But  what  we  do  know  is  that  the  increasing  mass  of  working  people, 
for  whatever  reason,  are  now  regarding  meat  as  a luxury  who  in 
happier  years  regarded  it  as  a necessity . 

I have  lived  a great  deal  among  peasants  who  had  come  from 
Bohemia,  Austria,  and  the  northeastern  part  of  Prussia  and  who  live 
in  what  we  call  the  slums  of  New  York  and  in  Chicago,  and  what  we 
see  is  that  those  newcomers  eat  very  much  less  nourishing  food. 

Mr.  Aswell.  This  bill  does  not  touch  the  retailer  ? 

Mrs.  Kelley.  No.  We  believe  that  in  addition  to  this  bill  there 
will  always  have  to  be  a cooperative  movement  as  there  is  on  the 
continent  of  Europe,  and  in  England,  to  take  care  of  the  retailers.  We 
do  not  believe  that  Congress  can  take  care  of  the  retailers;  that  would 


64 


MEAT  PACKER. 


be  like  asking  Congress  to  swat  the  fly.  We  think  there  ought  t< 
be  a great  cooperative  movement  to  do  that.  We  want  Congress  i 1 
deal  with  the  agricultural  industry,  with  the  railroads,  and  with  til  i 
packing  industry,  as  we  know  it.  We  think  we  ought  to  be  able 
through  a cooperative  movement,  to  take  care  of  the  little  fellows  I 

Mr.  Aswell.  Are  you  doing  anything  now  on  that  ? 

Mrs.  Kelley.  I explained  to  you  a moment  ago  how  exceedingly 
difficult  it  is  to  do  that  when  the  great  advertisers  are  warning  th( 
organs  of  publicity  that  it  is  an  unpopular  subject. 

Mr.  Tex  Eyck.  You  do  not  think  that  we  ought  to  pass  any  law  tc 
make  the  farmer  sell  his  produce,  that  is  to  say,  below  what  he  is 
now  selling  it  for  ? 

Mrs.  Kelley.  I certainly  do  not  want  to  see  any  farmer  diseouragec 
from  producing  more  milk  in  and  around  New  York  State.  We  have 
to  get  our  milk  in  New  York  State  from  five  other  States  and  Canada 
and  we  do  not  want  to  discourage  anybody  from  growing  any  food 
that  he  is  willing  to  grow. 

Mr.  Ten  Eyck.  In  other  words,  it  is  the  spread  between  the 
producer  and  consumer  that  should  be  taken  care  of  ? 

Mrs.  Kelley.  Yes,  sir.  We  see  the  farm  boys  coming  into 
town 

Mr.  Clarke  (interposing).  They  are  beginning  to  return  home-5 
ward.  I come  from  Catskill  and  the  Congressman  here  [indicating] 
comes  from  Albany. 

Mr.  Tincher.  What  do  they  do  when  they  get  home  ? ) 

Mr.  Clarke.  They  work  on  the  farms.  For  instance,  last  year  aft 
this  time  I went  out  to  get  help  on  my  farm — that  is,  in  addition  to  my 
ordinary  help— and  I offered  them  $100  a month  and  their  board.’ 
I could  not  get  them.  Now,  to-day,  those  boys  have  come  back  and; 
we  are  paying  them  $50  a month  and  board  right  there  now  to  help  us' 
with  the  crops.  I 

Mr.  Aswell.  Do  they  like  the  work  as  well  as  before  ? 

Mr.  Clarke.  They  do  the  work  now.  Their  money  has  been  spent,' 
some  of  them,  in  high  living  in  the  cities. 

The  Chairman.  Mrs.  Kelley,  you  have  studied  these  reports;  are; 
there  any  comprehensive  reports  on  profiteering  ? I have  reference 
now  to  the  retail  dealer,  the  packer,  the  manufacturer,  all  along  the 
line. 

Mrs.  Kelley.  We  have  no  hold  on  the  little  retailer  at  all.  We  do 
not  want  you  to  spend  time  on  him,  but  we  think  he  should  be  taken 
care  of  by  a cooperative  movement.  We  do  think  and  hope  that 
the  time  may  come  in  the  near  future  when  the  wholesale  dealers  in 
food  who  are  big  enough  to  be  seen  and  who  do  not  move  away  in 
the  middle  of  the  night,  may  be  licensed. 

The  Chairman.  Is  it  not  your  contention  that  the  profiteer  should 
be  eliminated  ? The  packers  contend  that  there  is  no  profiteering 
in  their  business,  the  merchants  contend  the  same  thing,  and  so  all 
along  the  line,  that  they  are  entitled  to  the  profit  they  are  getting. 

If  you  have  any  comprehensive  report  as  to  profiteering  so  that  we 
might  locate  the  source  of  the  evil,  we  should  be  glad  to  have  it. 

Mrs.  Kelley.  We  have  no  information  on  the  activities  of  the  j 
wholesaler,  because,  as  you  know,  Congress  has  never  arranged  for  him 
f°  be  licensed.  He  is  as  much  a Robin  Hood  as  the  packers.  He  I 
is  outside  the  pale  of  control  and  we  can  not  know  about  him. 


MEAT  PACKER. 


65 


Mr.  Aswell.  Is  it  your  opinion  that  the  packers  are  profiteers  ? 
Mrs.  Kelley.  Gentlemen,  I can  only  suggest  that  you  secure  a 
large  assortment  of  their  advertisements  of  their  stocks  and  bonds 

and  that  you  study  them.  , , 

Mr.  Clarice.  But  the  large  banking  houses  are  the  ones  who  adver- 
tise and  that  is  for  selling  purposes ? ..  £ , . , . 

Mrs.  Kelley.  After  all,  the  buyers,  after  a while,  find  out  what  they 
are  buying.  They  are  the  most  alert  on  these  questions , the 

women  are  not  yet  so  clever.  , 

Mr.  Ten  Eyck.  Is  it  not  a fact  that  what  we  need  m the  various 
States,  cities,  and  municipalities  throughout  the  country  are  better 
marketing  conditions  ? . 

Mrs.  Kelley.  Undoubtedly,  that  is  one  thing. 

Mr.  Ten  Eyck.  Is  not  that  really  the  secret  of  the  beginning  of  a 


successful  end  ? 

Mrs.  Kelley.  We  need  better  markets;  we  need  city  and  county 
slaughtering  houses;  we  need  a cooperative  movement;  we  need  the 
licensing  of  wholesalers,  and  we  need  better  control  of  the  freight 
rates ; but  it  is  very  difficult  to  get  any  of  those  when  the  organs  of 
publicity  know  that  it  is  an  exceedingly  unpopular  subject  to  discuss. 
Mr  Ten  Eyck.  Yet,  all  those  things  you  have  mentioned  come 


the  one  phrase  that  I used,  “ better  marketing 


directly  under 
conditions.” 

Mrs.  Kelley.  Yes,  sir;  we  want  all  of  those. 

Mr.  Aswell.  There  must  be  some  sort  of  a conspiracy  between  the 


packers  and  the  press  ? 

Mrs.  Kelley.  Not  at  all. 

Mr.  Clarke.  That  is  the  inference  that  I drew. 

Mrs.  Kelley.  I do  not  mean  that  there  is  a conspiracy  at  all.  If 
the  women  were  trying  to  run  a little  experimental  paper,  as  one  of 
the  gentlemen  has  suggested,  for  our  own  enlightenment,  we  should 
feel  very  grateful  to  anybody  who  would  take  five  full-page  adver- 
tisements a month.  Nobody  would  have  to  conspire  with  us. 

Mr.  Ten  Eyck.  Let  me  ask  you  another  question.  I he  value  ot 
a paper  for  advertising  purposes  is  its  circulation,  is  it  not  ? 

Mrs.  Kelley.  Yes,  sir.  . . , . ,T 

Mr.  Ten  Eyck.  Have  not  the  women  it  m their  power,  with  the 
Ladies’  Home  Journal,  the  Vogue,  and  a few  others,  to  control  half 


of  the  advertising  ? , 

Mrs.  Kelley.  As  I said,  gentlemen,  we  are  new  recruits,  and  we 

have  been  too  busy. 

Mr  Ten  Eyck.  You  understand  what  I mean  i 

Mrs.  Kelley.  Yes,  sir.  We  have  been  too  busy  getting  suffrage 
to  do  all  of  these  things  which  the  men,  who  have  not  had  that  particular 
struggle  on  their  hands,  have  not  succeeded  in  doing.  That  is  the  reason 
we  hope  Congress  very  soon  will  do  its  heavy  share  of  this  work. 

Mr.  Aswell.  Will  you  kindly  suggest  how  can  Congress  compel 
the  packers  to  stop  this  kind  of  business,  if  it  is  true  ? 

Mr  Tincher.  You  do  not,  as  I understand  you,  advocate  Congress 
stopping  that,  but  you  are  advocating  that  Congress  pass  the  neces- 

Mrs.  Kelley.  That  is  what  I am  advocating.  The  gentlemen  who 
sit  at  this  table  are  the  successors  to  the  gentlemen  who  have  been 


46985—21 5 


66 


MEAT  PACKER. 


sitting  around  this  table  for  50  years  dealing  with  these  matters. 
We  have  had  some  variety  of  experiments,  and  some  of  them  have 
been  very  useful  indeed.  What  could  be  more  useful  than  the  pure 
food  law,  the  inspection  of  cattle  for  tuberculosis,  and  the  whole 
long  series  of  life-saving  legislation  which  your  predecessors  en- 
acted— perhaps  some  of  them  are  still  here.  I remember  that  it  took 
20  years,  or  something  like  that,  16  or  18  years,  to  get  the  pure  food 
law  passed  and  working  satisfactorily,  but  nobody  would  undo  that 
now.  There  was  doubtless  the  same  objection  to  that  as  there  is  to 
this  legislation.  I remember  that  the  only  other  attack  that  the 
Consumers’  League  ever  suffered  was  from  the  brewers,  when  we 
were  helping  to  pass  the  pure  food  law.  I do  not  wish  at  all  to  evade 
the  question  which  was  asked  by  the  Representative  here.  I do  not 
fear  at  all  that  Congress  will  attempt  to  interfere  with  advertising 
which  runs  counter  to  the  legislation,  but  I think  they  will  perceive 
the  absence  of  a certain  kind  of  publicity  attending  their  own 
activities,  and  that  they  will  be  very  much  interested  in  the  coinci- 
dence between  the  advertising  and  the  silence. 

I do  not  know  whether  that  answers  your  question  satisfactorily. 

Mr.  Clarke.  Yes. 

Mr.  McLaughlin  of  Nebraska.  I should  like  to  ask  you  a question. 
I see  that  you  have  given  a great  deal  of  study  to  this  question  and 
undoubtedly  have  a personal  opinion  as  to  the  agency  that  should 
be  created  for  the  enforcement  of  a law  such  as  we  are  contemplating, 
if  any  law  is  passed.  Some  of  the  bills  which  have  been  introduced 
propose  to  make  the  supervising  agency  the  Department  of  Agri- 
culture, others  select  the  Federal  Trade  Commission,  and  others 
propose  the  creation  of  an  entirely  new  commission  to  handle  this 
subject  alone.  It  seems  to  me  if  any  legislation  is  to  be  had  at  all, 
if  it  is  needed,  that  we  want  an  enforcement  agency  or  supervisory 
agency  that  will  be  the  most  capable  possible  and  that  will  be  able  to 
devote  all  of  its  time  to  the  study  and  consideration  of  the  subject. 
It  has  seemed  to  me  that  the  influence  and  scope  and  the  great  volume 
of  this  industry  is  such  and  of  such  vital  importance  to  the  entire 
people  that  it  is  going  to  necessitate,  if  any  legislation  is  to  d o all  we 
want  it  to  do,  the  creation  of  a commission  to  deal  with  this  subject 
only.  If  you  have  an  opinion,  I should  like  to  have  it. 

Mrs.  Kelley.  I should  say,  sir,  that  my  organization  has  not  voted 
on  that  particular  matter,  but  my  own  personal  opinion,  which,  I 
think,  weighs  somewhat  with  our  organization,  is  this:  When  the 
Federal  Reserve  Board  was  created  the  Treasury  Department  was  al- 
ready in  existence  and  operating.  I do  not  know  how  much  Congress, 
discussed  the  propriety  of  placing  the  functions  of  the  Federal  Re- 
serve Board  with  the  Treasury,  but  in  the  end,  I think,  no  one  would 
wish  to  have  that  done,  and  least  of  all  the  Secretary  of  the  Treasury. 
I think  it  is  considered  that  there  ought  to  be  a Federal  Reserve 
Board  by  itself  to  deal  with  an  activity  so  great  as  the  activity  of  the 
banking  interests  of  the  country.  I should  think  there  ought  to  be  an 
organization  entirely  outside  of  the  Agricultural  Department,  not  to 
interfere  with  what  the  Agricultural  Department  already  does  but 
to  supplement  its  activities  and  to  deal  distinctly  with  the  transporta- 
tion aspect  and  with  all  the  ramifying  aspects  that  have  nothing 
whatever  to  do  directly  with  the  guidance  or  the  immediate  super- 


MEAT  PACKER. 


67 


vision  of  the  farmer  on  his  farm.  I do  not  see  how  we  could  ask  the 
Department  of  Agriculture  to  go  out  into  fields  that  are  alien  to  its 
past  experience.  The  Secretary  of  Agriculture  automatically  changes 
every  four  years  or  every  eight  years.  I should  think  that  the  com- 
mission ought  to  be  so  arranged  as  to  have  a continuing  personnel. 

Mr.  As  well.  Do  you  think  that  the  Federal  Trade  Commission 
could  better  handle  it  ? 

Mrs.  Kelley.  If  I personally  had  to  choose,  with  my  limited 
knowledge,  I should  say  that  I think  the  Federal  Trade  Commission 
should  be  given  these  powers.  It  might  need  to  expand  its  present 
activities,  or  perhaps  it  might  be  relieved  of  some  of  its  present 
activities,  but  it  seems  to  me  that  the  Federal  Trade  Commission 
would  be  well  adapted  to  this  work. 

If  there  are  no  other  questions,  I thank  you,  gentlemen,  very  much. 

Mr.  McLaughlin  of  Nebraska.  Mr.  Chairman,  I should  like  to  call 
Mrs.  Costigan  to  state  briefly  what  her  convictions  are  on  the  ques- 
tion which  I have  just  asked  Mrs.  Kelley. 

The  Chairman.  Certainly. 

Mr.  McLaughlin  of  Nebraska,  Mrs.  Costigan,  please  just  give  us 
your  personal  convictions. 

Mrs.  Costigan.  I agree  with  Mrs.  Kelley.  The  packing  industry 
has  become  very  great.  I think  it  would  take  the  entire  time  of  a 
commission  to  regulate  it.  If  it  does  not  seem  wise  to  appoint  a new 
commission,  probably  the  Federal  Trade  Commission  could  set  up 
I the  machinery  to  look  after  it. 

Mr.  McLaughlin  of  Nebraska.  I thank  you. 

| The  Chairman.  The  Secretary  of  Agriculture  has  notified  us  that 
he  can  not  appear  before  the  committee  before  Thursday. 

Mr.  Veeder.  Of  course,  we  have  some  men  that  could  be  heard. 

The  Chairman.  Certainly,  some  arrangement  can  be  made;  we 
want  to  make  it  absolutely  agreeable. 

Mr.  Veeder.  We  will  not  have  any  opposition.  We  had  figured 
on  going  on  to-morrow  morning.  I have  two  or  three  gentlemen 
here,  but  they  will  only  take  15  or  20  minutes  apiece.  They  want  to 
follow  instead  of  leading.  I think  that  we  will  go  on  to-morrow  and 
Thursday,  and  whenever  the  Secretary  comes  in  we  will  give  way.  I 
do  not  see  any  other  way  to  do  that. 

Mr.  Tincher.  Will  you  run  over  Friday? 

I Mr.  Veeder.  We  may  run  Saturady  or  Sunday,  as  you  say. 

Mr.  Tincher.  There  will  be  no  hearings  on  Saturday  or  Sunday. 

Mr.  Veeder.  I do  not  think  we  will  do  that. 

Mr.  Tincher.  If  you  do,  I am  going  to  work  Sunday. 

I Mr.  Veeder.  If  we  have  some  witnesses  we  might  sit  a little  later 
in  the  evening. 

i The  Chairman.  Without  objection,  arrangements  will  be  made  to 
hear  the  Secretary  on  Thursday. 

(There  was  no  objection.) 

The  Chairman.  We  will  now  hear  Mr.  Atkeson,  the  representative 
of  the  National  Grange. 


68 


MEAT  PACKER. 


i 


STATEMENT  OF  MR.  THOMAS  C.  ATKESON,  REPRESENTATIVE, 

NATIONAL  GRANGE,  PATRONS  OF  HUSBANDRY,  WASH- 
INGTON, D.  C. 

Mr.  Atkeson.  Mr.  Chairman  and  gentlemen  of  the  committee,  to 
those  who  have  been  members  of  the  committee  for  some  years  past 
I do  not  need  any  introduction,  and  to  the  newer  members  of  the  com- 
mittee I will  say,  by  way  of  introduction,  that  I represent  the  oldest 
farmer  organization  in  the  country.  It  is  now  55  years  of  age,  and  if 
it  has  not  learned  something  in  that  time  it  should  have  been  chloro- 
formed when  young.  So,  we  are  largely  a conservative  farm  organiza- 
tion, with  a membership  of  something  like  800,000.  This  organization 
is  maintaining  in  Washington  an  office,  which  I happen  now  to  be  in 
charge  of,  with  two  assistants.  I think  I might  say  that  the  expenses 
of  this  office  fall  entirely  upon  the  producing  farmers  of  the  country 
and  it  does  not  cost  the  farmers  to  exceed  1 cent  apiece  a year  for 
the  total  expense  of  our  office  in  this  city. 

We  have  sent  a little  booklet  to  all  the  Members  of  Congress,  which 
perhaps  some  of  you  have  done  us  the  honor  to  read.  If  you  have 
read  this  booklet,  a copy  of  which  I hold  in  my  hand,  you  know 
something  about  why  we  are  here. 

I think  I will  read  a single  paragraph : 

For  more  than  half  a century  the  Grange  has  been  speaking  for  the  best  interests  of  ! 
its  members,  who  are  engaged  in  the  business  of  farming.  Its  representation  at  the 
National  Capitol  is  not  “a  lobby”  in  the  commonly  accepted  meaning  of  that  term,  t 
and  never  has  been.  There  are  no  doubtful  or  ulterior  interests  to  be  served  by  the  ? 
representative  of  the  National  Grange  and  no  unclean  dollars  to  pay  for  such  services  ; 
as  are  rendered. 

The  interests  which  the  Washington  representative  of  the  National  Grange  speaks  ; 
for  are  those  of  the  industry  of  agriculture,  the  industry  upon  which  rests  not  only 
the  economic  structure  of  American  business,  but  the  political  structure  of  American  , 
democracy  and  the  welfare  of  all  the  people.  It  is  our  purpose  to  present  to  Congress  S 
the  desires  and  the  necessities  of  the  farmers  of  this  Nation  and  the  sociological  and  ( 
economic  facts  from  which  these  desires  and  necessities  arise  and,  as  fairly  and  as  j 
fully  as  possible,  the  views  of  the  real  working,  producing,  substantial  farmers,  not  ] 
as  a selfish  or  class  interest,  but  to  protect  this  basic  industry  against  misunder-  ■ 
standing  and  exploitation  which  must  inevitably  result  in  serious  injury  to  all  classes. 

Now,  dealing  with  this  packer  question,  I have  made  so  many  : 
statements  before  this  committee  and  the  committees  of  the  Senate 
that  I feel  at  a loss  to  take  your  time  for  any  considerable  length  of 
time  in  repeating  the  things  I have  said  heretofore. 

For  10  or  12  years,  as  I recall,  the  agitation  for  some  sort  of  control 
of  the  great  packing  industry  has  been  going  on  in  the  country.  It 
seems  to  me  the  time  has  come,  in  the  fullness  of  time,  when  Congress 
should  definitely  put  on  the  statute  books  some  constructive  legisla- 
tion dealing  with  the  packer  problem,  not  for  the  purpose  of  injuring 
the  packers  or  injuring  anyone  else  but  for  the  sole  purpose  of  pro- 
tecting, as  far  as  may  be  done  safely  by  statute,  the  interests  of  all  j 
the  people,  the  great  consuming  public,  against  possible  exploitation 
by  this  large  problem  of  distributing  the  meat  of  the  Nation  to  every- 
body’s breakfast  table,  dinner  table,  and  supper  table. 

I think,  perhaps,  not  many  people  realize  as  fully  as  I do  the  enor- 
mous proportions  of  that  undertaxing.  When  we  take  into  account ! 
that  we  have  more  than  100,000,000  people  and  that  every  family 
in  this  Nation,  so  far  as  I know,  if  they  have  the  price,  can  have  pork 
chops  to-morrow  morning  for  breakfast  delivered  at  their  back  door 


MEAT  PACKER. 


69 


in  time  for  breakfast,  or  beefsteak  for  breakfast,  or  lamb  chops,  to 
take  these  meat  products  from  the  7,000,000  farms,  more  or  less, 
and  off  the  plains  of  the  West  and  take  them  through  all  the  processes 
of  manufacture  and  distribution  and  delivery  to  the  doors  of  the 
consumers  of  this  country,  365  days  in  the  year,  is  an  enormous  under- 
taking, requiring  a tremendous  capitalization,  a tremendous  machinery 
of  distribution,  and  the  packers  in  some  measure  have  accomplished 
this  large  undertaking. 

It  is  possible  they  might  have  accomplished  this  with  less  profit  to 
themselves  and  greater  profit  to  the  public.  Some  people  think  that 
it  is  demonstrable  that  they  might  easily  have  accomplished  this 
tremendous  service,  the  importance  of  which  we  all  recognize,  with 
less  profit  to  themselves  and  more  profit  to  the  public. 

This  seems  to  me  to  be,  in  brief,  the  problem  that  Congress  must 
consider  or  should  consider,  whether  in  fairness  to  the  packers  and  in 
fairness  to  the  producers  and  the  consumers,  this  tremendous  service 
which  they  have  rendered  should  have  been  rendered  more  econom- 
ically, more  efficiently,  and  at  less  cost  to  the  consumer;  that  is, 
whether,  so  far  as  they  are  concerned,  they  could  have  taken  out  of 
this  problem  of  feeding  the  people  some  part  of  the  spread,  as  we 
sometimes  say,  between  the  producer  and  the  consumer. 

I have  been  interested  in  that  spread  problem.  Somebody  has  to 
be  paid,  of  course,  for  this  tremendous  service  that  is  rendered  in  dis- 
tributing these  products;  but  two  years  and  four  months  or  there- 
abouts ago,  when  I came  to  Washington,  we  sold  a flock  of  pretty 
high-grade  sheep  for  $16  a head.  A short  time  before  that  we  could 
have  sold  them  for  $20  a head,  and  now  we  could  not  sell  them  for  $4, 
and  yet  I am  paying  the  same  price  for  lamb  chops  in  the  same 
restaurant  now  that  I paid  two  years  ago.  I get  my  lunch  down  in 
the  city  every  day,  and  I am  pretty  fond  of  lamb  chops  and  once  or 
twice  a week  I order  lamb  chops  at  the  same  restaurant,  and  with  the 
same  service,  and  when  I actually  sold  sheep  at  $16  a head  I paid  the 
same  price  that  I am  paying  now  when  I could  not  get  $4  a head  for 
those  same  sheep  on  my  farm  down  in  West  Virginia;  and  I am 
wondering  what  I would  pay  for  lamb  chops  if  I did  not  get  anything 
for  sheep. 

It  is  my  firm  belief  that  if  the  farmers  of  this  country  did  not  get  a 
single  cent  for  their  meat  products  it  would  make  precious  little 
difference  in  a Washington  hotel  or  restaurant. 

Now,  something  happens  to  these  farm  products  after  they  leave 
the  farm,  and  it  is  up  to  these  city  people  to  find  out  what  it  is.  The 
farmers  are  certainly  not  to  blame  for  whatever  occurs  after  it 
leaves  their  feed  lots  and  their  railroad  stations,  or  after  it  leaves 
their  hands.  Maybe,  they  are  profiteers. 

Some  people  seem  to  think  so,  but  after  the  commodity  leaves  the 
hands  of  the  farmer,  like  my  lamb  chops,  it  does  seem  to  me  that 
when  the  price  of  sheep  has  decreased  in  these  two  years  three-fourths 
of  their  former  value,  it  ought  to  manifest  itself  somehow  or  other 
in  the  price  I pay  for  lamb  chops  in  Washington,  but  I know  it  has 
not  done  so.  I know  that  is  not  so  this  week. 

Mr.  Tincher.  Maybe  the  decrease  is  in  the  price  of  the  tallow. 

Mr.  Atkeson.  Possibly,  I do  not  know.  I am  raising  these 
questions  for  my  lady  friends  and  other  friends  in  the  city  to  answer. 


70 


MEAT  PACKER. 


Mr.  Ten  Eyck.  You  stated  a while  ago  that  if  perhaps  the  farmer  j 
really  gave  his  sheep  away  there  would  be  no  difference.  Not  over  j 
60  or  90  days  ago  a man  sent  some  sheep  out  to  the  stockyards  at 
Chicago  and  his  return  was  10  cents  a head.  That  is  a fact.  He 
came  pretty  near  giving  them  away. 

Mr.  Atkeson.  I just  raise  that  question  simply  as  an  illustration 
to  show  that  in  this  matter  of  distribution  and  in  this  matter  of 
spread,  about  which  much  is  said,  between  the  producer  and  the ; 
consumer,  that  there  is  a very  intricate  question,  and  it  seems  to 
me  it  is  more  the  city  man’s  question  than  it  is  the  farmer’s  question. 

Mr.  Purnell.  You  have  a pretty  definite  idea  as  to  just  what; 
does  happen,  and  I think  you  ought  to  give  the  committee  the  benefit 
of  your  judgment  on  that. 

Mr.  Atkeson.  As  to  what  I think  the  committee  should  do? 

Mr.  Purnell.  No;  tell  us  just  what  does  happen,  in  your  judgment. 

Mr.  Clarke.  Yes:  tell  us  where  his  profit  is  going. 

Mr.  Atkeson.  Well,  we  are  going  now  into  the  philosophy  of  a 
large  question,  when  we  undertake  to  tell  what  happens. 

Mr.  Aswell.  Do  not  give  us  the  philosophy,  but  tell  us  just  what  ; 
happens. 

Mr.  Atkeson.  I think  I know  what  happens. 

Mr.  Aswell.  That  is  what  we  all  want  to  know. 

Mr.  Atkeson.  And  I think  I know  what  has  got  to  happen. 

Mr.  Clague.  Tell  us  just  those  two  things. 

Mr.  Atkeson.  But  maybe  I am  mistaken.  j 

Mr.  Purnell.  You  know  this  is  the  buck-passing  age. 

Mr.  Atkeson.  To  begin  with,  this  thing  I do  know,  that  the  aver- 
age wage  on  present  prices  that  the  farmer  can  pay  on  the  average,  ? 
does  not  exceed  $1  a day  for  a 10-hour  day.  After  50  years  of  dig- 
ging into  soil  and  wrestling  with  this  problem,  based  on  the  present; 
price  of  farm  products,  the  average  farm  wage — in  harvest,  and  at; 
other  times,  you  can  pay  more — that  the  farmers  can  pay  is  $1  aj 
day  for  a 10-hour  day.  They  can  not  pay  more  than  that  and*; 
prosper. 

Mr.  Clarke.  A dollar  a day  and  board  ? 

Mr.  Atkeson.  A dollar  a day  and  board,  and  in  some  cases,  per- 
haps, without  the  board.  I could  give  all  sorts  of  figures  and  evi- 
dence to  prove  that  proposition. 

Mr.  Aswell.  We  accept  that  statement.  I think  you  are  right 
about  that. 

Mr.  Atkeson.  Now,  that  being  true,  you  can  not  maintain  for  any 
considerable  length  of  time  the  present  spread  between  what  the  | 
farmer  is  getting  and  what  he  is  able  to  pay  his  hired  man  and  feed 
this  Nation,  with  somebody  getting  10  or  20  times  that  much  for  less 
skill  and  less  labor. 

Mr.  Clarke.  And  with  no  invested  capital. 

Mr.  Atkeson.  Somebody  must  settle  that  question.  Either  the1 
prices  of  farm  produce  in  this  country  must  go  up  or  the  prices  of 
what  the  farmer  buys  and  what  the  public  generally  buys  must  go 
down  or  calamity  is  not  far  ahead  of  this  Nation.  It  is  safer  to  write 
history  than  it  is  to  write  prophesies,  so  I do  not  undertake  to 
prophesy,  but  I made  an  investigation  last  summer  bearing  on  this 
question.  Down  in  one  of  the  prettiest  valleys  in  my  State,  where 


MEAT  PACKER. 


71 


I hunted  rabbits  for  50  or  GO  miles  around,  I tried  last  summer  to 
find  a single  man  in  that  area,  a young  man  between  20  years  of  age 
and  40,  who  was  unmarried  and  unhampered  with  a family  who  was 
on  any  of  that  farm  land.  They  have  all  migrated  to  town.  There 
are  a few  old  men  and  a few  boys  and  a few  girls  letting  the  briars 
grow  in  the  fence  corners,  letting  the  barns  rot  down  and  the  homes 
go  unpainted,  striving  to  make  a living,  but  doing  nothing  but  cul- 
tivating the  soil  and  producing  a crop  and  letting  other  conditions 
go  unattended  to  simply  because  they  can  not  afford  to  do  otherwise. 

Now,  somebody  is  going  to  feed  this  Nation.  The  fields  are  going 
to  be  cultivated,  but  I do  not  know  who  is  going  to  continue  to  cul- 
tivate them  under  present  conditions. 

I said  awhile  ago  I thought  I knew  what  the  trouble  was.  Rents 
in  Washington  are  just  as  high  as  they  ever  were;  wages  in  Wash- 
ington are  just  as  high  as  they  ever  were.  So  far  as  I know,  profits 
are  just  as  high  as  they  ever  were,  and  that  is  not  true  in  the  country. 
That  is  not  true  on  the  farm.  Now,  then,  from  the  time  the  food 
that  feeds  the  Nation  leaves  the  hands  of  the  producer  there  are  just 
two  things  that  happen  to  it  and  nothing  else;  just  two  things  get 
into  it  after  it  leaves  the  farm,  and  nothing  else,  and  that  is  labor 
and  profit.  Labor  and  profits  are  too  high  compared  with  what  the 
producer  got  when  it  left  his  hands  for  a prosperous  country.  What 
the  producer  gets  is  such  a small  proportion  of  what  the  consumer 
pays,  after  you  have  added  these  numerous  profits  and  the  high  cost 
of  labor,  that  it  cuts  practically  no  figure. 

I went  to  a tailor  shop  last  week  and  have  under  contract  now  a 
suit  of  clothes  that  is  being  made  in  this  city.  I need  not  tell  the 
price,  but  it  is  about  three  times  what  it  would  have  cost  in  1913. 
There  is  not  more  than  S3  worth  of  wool  that  the  producer  got  paid 
for  in  that  suit  of  clothes,  and  we  will  assume  it  is  a $60  suit  of  clothes. 
Now,  that  means  that  $57  worth  of  something  besides  wool  gets  into 
that  suit  of  clothes,  and  every  single  person  that  touched  it  from  the 
time  the  wool  left  the  farmer  until  it  gets  into  that  suit  of  clothes 
will  put  his  books  on  the  table  and  prove  an  alibi  as  to  being  a profit- 
eer; every  single  one  of  them.  I simply  take  this  $60  suit  of  clothes 
as  an  illustration.  There  has  gotten  into  that  suit  of  clothes  abso- 
lutely no  material  substance,  nothing  but  profits  and  labor  to  the 
extent  of  $57  as  against,  say,  $3  worth  of  wool  that  the  producer  got 
for  it.  Now,  if  the  producer  had  got  nothing  for  his  wool  I think  it 
would  still  have  been  a $60  suit  of  clothes.  At  any  rate,  the  man 
who  bought  it  would  not  have  known  much  difference  between  $57 
and  $60.  He  still  would  have  thought  that  it  was  a pretty  high 
price  for  that  suit  of  clothes. 

I do  not  think  Congress  can  cure  that  condition,  but  that  is  what 
is  the  matter.  Now,  if  some  of  you  gentlemen  can  cure  it 

Mr.  Ten  Eyck.  Is  there  not  one  other  thing  in  addition  to  that, 
the  tremendous  cost  of  distribution,  the  consumer  sitting  in  his  home 
and  telephoning  for  a quart  of  tomatoes  and  distributing  food  in 
that  way  in  the  various  communities?  That  cost  should  be  cut 
clown.  That,  of  course,  is  labor  also,  but  it  takes  a lot  of  other  things 
into  consideration. 

Mr.  Atkeson.  Yes;  there  is  involved  there  somebody’s  profits 
and  somebody’s  labor  and  somebody’s  convenience,  and  we  have  to 


72 


MEAT  PACKER. 


pay  for  all  those  things.  We  talk  about  the  telephone  as  being  a 
great  blessing,  but  when  you  come  to  measuring  what  it  has  cost  the 
people  of  this  Nation,  it  is  an  abominable  nuisance. 

Mr.  Ten  Eyck.  And  the  two  classes  of  people  suffering  from  this 
condition  to-day  are  the  producers  and  the  consumers. 

Mr.  Atkeson.  That  is  right,  and  the  consumer  is  howling,  and  so 
is  the  producer,  and  so  is  everybody  else. 

Mr.  Aswell.  You  say  that  Congress  can  not  correct  that  situation  ? 

Mr.  Atkeson.  I said  that  the  telephone  is  a nuisance.  I live  two 
squares  and  a half  from  four  or  five  grocery  stores.  My  wife  forgets 
about  ordering  things  until  about  15  or  20  minutes  before  mealtime. 
Before  we  had  telephones  I would  lug  in  myself  enough  stuff  to  last 
a week,  and  we  used  to  buy  things  very  cheaply.  Now,  I do  not 
carry  anything.  I get  off  the  carline  right  where  there  are  four  or 
five  grocery  stores,  and  if  she  would  tell  me  in  the  morning  what 
she  wanted  I would  try  to  get  down  there  and  get  in  the  habit  of 
doing  that.  That  is  what  I used  to  do.  Now,  we  do  not  carry 
anything  from  the  grocery  store  in  these  days.  Even  if  my  wife 
goes  up  there  and  buys  it  the  groceries  are  delivered  to  her.  I do 
not  blame  her  for  not  carrying  them  herself,  because  that  is  the  game 
we  are  all  playing  now;  but  she  actually  pays  20  cents  more  for  a 
12-pound  sack  of  flour  by  having  it  delivered,  and  I could  carry  it 
two  squares  for  20  cents  myself.  No,  she  jerks  down  the  telephone 
and  tells  them  to  send  it  down,  and  then  pays  the  bill. 

Mr.  Purnell.  There  is  no  need  of  her  carrying  it  because  every- 
body else  is  not  doing  that  ? 

Mr.  Atkeson.  Yes;  and  we  all  have  to  pay  for  that  service. 

Mr.  Aswell.  You  said  that  Congress  could  not  handle  this  matter. 
How  can  it  be  handled  ? 

Mr.  Atkeson.  As  long  as  we  can  pay  for  it  we  are  going  to  pay 
for  it,  and  have  the  luxuries  of  life. 

Mr.  Aswell.  But  that  disaster  you  spoke  of  awhile  ago  is  pretty 
near  at  hand,  is  it  not  ? 

Mr.  Atkeson.  That  phase  of  it  I do  not  think  Congress  can  deal 
with  at  all. 

Mr.  Purnell.  I am  glad  to  know  that  in  your  judgment  there  is 
something  Congress  can  not  do. 

Mr.  Jones.  This  is  the  first  time  I ever  heard  anybody  admit  that. 

Mr.  Atkeson.  You  consider  automobiles  a great  convenience,  yet 
they  are  literally  costing  this  Nation  billions  of  dollars  to-day  more 
than  they  are  worth.  You  can  just  figure  it  in  billions,  and  some- 
body has  got  to  pay  the  fiddler.  When  I was  a boy  and  danced,  the 
fellow  that  danced  paid  the  fiddler,  and  now  somebody  has  got  to  pay 
him.  We  are  engaging  in  these  luxuries  and  we  are  flying  high.  Some 
of  you  will  remember  the  old  mythological  story  of  Actius,  who  stuck 
on  his  wings  with  wax  and  undertook  to  fly  across  the  Hellespont  and 
fell  in;  that  is,  when  he  got  in  there  it  was  Hellespont  with  the 
‘spont”  left  out.  We  are  flying  high  now. 

We  are  getting  a little  bit  off  the  subject. 

Mr.  Purnell.  I think  we  are  right  on  the  subject. 

Mr.  Jones.  So  do  I. 

Mr.  Purnell.  I think  you  shot  at  the  deer  and  missed  it  and  hit 
the  cow. 


MEAT  PACKER. 


73 


Mr.  Atkeson.  Well,  I promised  myself  and  the  chairman  that  I 
would  not  take  over  15  minutes. 

Mr.  Aswell.  You  have  not  offered  any  remedy.  I would  like  to 
have  your  suggestion  as  to  what  should  be  done. 

Mr.  Atkeson.  There  is  not  any  remedy,  in  my  opinion,  whatever 
that  may  be  worth.  These  problems  are  economic  and  must  solve 
themselves. 

Mr.  Aswell.  Then  why  devote  our  time  to  discussing  them  ? 

Mr.  Atkeson.  I do  not  expect  Congress  to  solve  them. 

Mr.  Ten  Eyck.  Did  not  our  preceding  witness  give  us  a little  sug- 
gestion along  that  line,  in  that  a little  more  cooperation  between  the 
purchasers  and  the  producers  would  cut  out  a lot  of  these  difficulties  ? 

Mr.  Atkeson.  Yes;  cooperation  may  solve  part  of  it. 

Mr.  Jones.  Mr.  Atkeson,  let  me  ask  you  a question.  Do  you  not 
think  that  this  country  could  establish  a sort  of  marketing  system 
whereby  the  original  products  could  be  standardized,  in  a way,  and 
publicity  given  so  that  the  demand  in  one  country  would  be  known 
generally,  and  the  supply  in  another  section  would  be  known,  and 
then  have  the  product  graded  in  such  a way  that  there  would  be  a 
guaranty  to  the  consumer  that  he  could  order  direct  and  get  around 
these  distributors,  and  thus  force  them  down,  not  so  much  for  the 
purpose  of  distribution,  but  to  force  down  the  cost  of  these  things. 

Mr.  Atkeson.  We  favor  standardization  and  we  favor  cooperation, 
both  on  the  part  of  the  producers  and  the  consumers,  and  we  think 
that  all  the  costs  of  distribution  that  can  be  reduced  should  be 
reduced,  and  many  of  the  things  you  suggest  will  have  some  influence 
on  the  situation  in  reducing  the  costs,  but  the  fact  remains  that 
there  is  this  high  cost  of  service  of  every  kind,  labor  and  high  profits, 
and  we  must  have  high  profits  if  we  are  to  live  up  to  this  standard  of 
living  that  we  are  living  up  to  now,  and  somebody  must  pay  the 
bill. 

Mr.  Jones.  I understand  that.  Of  course,  it  is  not  always  true 
that  the  profits  on  every  article  are  excessive,  but  occasionally  they 
are.  Now,  if  there  were  a system  whereby  you  would  not  ship  clear 
across  the  country  always,  but  have  a system  whereby  products 
would  be  concentrated  close  to  the  point  of  production  and  then  wait 
until  there  is  a demand,  and  then  have  a system  of  publicity  whereby 
the  local  community  that  needed  a certain  article  would  know  where 
to  get  that  article  of  a certain  guaranteed  standard,  then  it  could  get 
it  direct.  If  some  of  these  fellows  did  not  charge  too  much  then 
perhaps  they  would  not  use  this  system  much,  but  would  have  it 
as  a check  to  hold  those  fellows  down  when  they  do  charge  too  much. 

Mr.  Atkeson.  All  those  questions  are  involved  in  a very  intricate 
commercial  system,  and  so  far  as  they  can  be  improved  it  is  the  duty 
of  our  commercial  interests  to  improve  them.  I do  not  conceive  it  to 
be  the  duty  of  Congress  to  improve  those  conditions  except  to  make 
laws  under  which  they  may  function  and  operate. 

Mr.  Jones.  Do  you  not  think  that  even  a system  of  marketing 
reports  that  are  sent  out  aid  in  holding  down  these  prices  ? 

Mr.  Gernerd.  Do  you  not  think  that  those  reports  help  very  much 
and  that  we  ought  to  establish  markets  all  over  the  country  at  ad- 
vantageous distributing  points  to  take  care  of  your  products  and  then 
have  market  reports  that  would  give  information  about  the  supply 
and  the  demand  ? 


74 


MEAT  PACKER. 


Mr.  Jones.  That  is  what  I was  suggesting,  that  we  have  concen- 
tration points  at  various  places  and  then  have  a system  of  publicity 
as  to  the  points  where  these  articles  can  be  obtained  direct,  where  the 
consumer  can  get  in  direct  touch  with  a producer  or  producing  organi- 
zation and  where  he  can  order  direct  if  the  prices  of  certain  articles 
get  absurdly  high.  That  plan  would  not  have  to  be  used  very  much. 
If  that  system  were  available,  then  these  so-called  profiteers  would 
not  be  profiteering  so  much,  would  they  ? That  is  not  an  original 
idea  of  mine,  I will  say. 

Mr.  Atkeson.  Whether  we  could  do  those  things  by  legal  processes! 
is  debatable  in  my  mind.  We  know  now  where  to  get  the  things  we 
want,  and  most  of  us  go  to  the  most  convenient  retail  stores  to  get 
them. 

Mr.  Jones.  You  can  not  cure  that,  of  course,  but  there  are  others 
who  are  doing  without  those  things  that  really  would  be  entitled  to 
get  them,  and  would  get  them,  if  they  had  a direct  way  of  getting 
them. 

Mr.  Clarke.  I know  of  a large  sheep  grower  who  had  two  years’ 
wool  clip  out  in  Montana  that  he  had  not  disposed  of.  He  came. 
East  and  made  arrangements  with  a mill  and  got  all  this  wool  made 
up  into  suitings.  Then  he  got  in  touch  with  a number  of  the  big 
copper  companies  and  set  a time  when  he  would  be  at  Salt  Lake  City 
and  at  Bisbee  and  Globe  and  different  towns  around  in  that  country,' 
and  then  he  went  around  to  those  camps,  taking  his  tailors  with  him, 
and  he  sold  his  entire  wool  clip  in  that  way,  and  a man  could  get  a: 
suit  of  clothes  made  up  for  from  $32  to  $40,  and  they  have  been 
waiting  up  in  New  York  for  him  to  show  up  there. 

Mr.  Tincher.  Pardon  me  for  referring  to  the  subject  matter  under 
consideration  by  the  committee,  but,  as  I understood  while  you  were 
giving  your  views  on  the  subject,  you  think  it  is  time  that  Congress; 
passed  some  constructive  legislation  with  reference  to  the  packing! 
industry  of  this  country  ? 

Mr.  Atkeson.  Yes,  sir;  that  is  right.  ; 

Mr.  Tincher.  For  several  years  your  organization  has  had  this 
subject  up  for  consideration? 

Mr.  Atkeson.  Yes,  sir. 

Mr.  Tincher.  You  think  there  are  evils  in  the  monopoly  of  the 
packer  industry  that  require  legislation  along  that  line  ? 

Mr.  Atkeson.  I think  so;  that  is,  I think  there  should  be  legisla- 
tion dealing  with  the  packers  because  of  the  magnitude  of  their 
undertaking. 

Mr.  Tincher.  After  we  get  through  with  that  if  there  is  some  gen- 
tleman who  has  a bill  which  will  cure  all  the  evils  which  you  think 
probably  can  not  be  cured  except  by  time  then  we  will  take  that  up  1 

Mr.  Atkeson.  Yes,  sir. 

Mr.  Jones.  Which  bill  do  you  think  is  the  best  ? 

Mr.  Atkeson.  I will  come  to  that  in  a minute  in  an  orderly  way. 
I just  want  to  make  one  remark  about  this,  and  then  I will  come  to 
that. 

In  my  study  of  the  subject  and  in  my  make-up  I can  not  possibly 
be  a pessimist. 

Mr.  Clarke.  Can  not  be  what  ? 

Mr.  Atkeson.  A pessimist,  that  is,  believe  that  this  country  is 
going  to  the  bad.  I think  we  will  solve  all  our  difficulties  in  some 


MEAT  PACKER. 


75 

form  or  other.  I am  just  as  far  from  being  an  optimist  in  the  ordi- 
nary definition  of  the  word  “ optimist,”  that  believes  everything  is 
just  as  it  ought  to  be  and  that  it  could  not  be  made  any  better.  So 
I have  invented  a new  word  which  to  my  mind  describes  my  state 
of  mind,  and  that  is  the  word  “ meliorist.”  You  will  not  find  it  in 
the  dictionary  or  anywhere.  I believe  it  is  the  duty  of  Congress  and 
every  good  citizen  to  do  what  they  can  to  ameliorate  or  meliorate — 
both  those  words  are  found  in  the  dictionary — the  conditions  that 
confront  us.  They  are  serious  enough.  The  packer  legislation  is 
one  of  the  things  that  I would  do  to  ameliorate  the  present  situation; 
I think  they  should  be  controlled,  but  in  order  to  reach  my  conclu- 
sion in  a more  orderly  way  than  I have  been  proceeding,  our  organiza- 
tion for  a good  many  years  has  passed  a good  many  resolutions,  but 
they  passed  this  one  last  year : 

While  recognizing  the  evils  of  uncurbed  power  growing  from  swollen  fortunes  in 
the  hands  of  unscrupulous  and  ambitious  individuals,  the  National  Grange  declares 
that  in  the  government  of  a free  democracy  is  lodged  ample  power  to  curb  all  such 
evils.  We  declare  our  opposition  to  Government  ownership  and  to  nationalization 
of  business  and  industry  unless  clearly  required  in  the  public  interest.  We  favor 
the  safeguarding  and  protection  of  every  right  of  private  property  on  the  broad  ground 
that  only  by  the  full  development  of  the  right  of  private  property  can  there  be  per- 
petuated the  full  measure  of  individual  initiative  and  emulation  upon  which  a democ- 
racy is  based,  and  by  which  its  future  is  assured. 

Now,  further  on,  during  the  same  session  of  our  organization  last 
November,  we  passed  this  resolution  which  connects  somewhat  with 
the  thought  in  the  other : 

The  right  of  Government  control  of  all  trusts  and  corporations  is  fundamental  and 
the  grange  demands  that  such  organizations  shall  be  subordinated  to  the  interest  of 
the  public  and  operated  without  extortion  or  discrimination.  We  insist  that  profiteers, 
speculators,  and  corporations  unjustly  controlling  prices  and  supply  of  necessities  of 
life  should  be  severely  punished  not  by  fine  alone  but  by  imprisonment  as  well. 

Those  that  will  read  this  bulletin  will  see  that  we  have  a good  many 
things  but  dealing  with  the  packers  directly: 

The  instrumentalities  for  the  distribution  of  food  are  matters  of  public  concern. 
The  grange  demands  that  they  shall  be  brought  under  Government  registration  and 
be  made  subject  to  governmental  control  with  means  provided  to  judicially  inves- 
tigate all  operations  and  to  correct  abuses  by  such  legally  enforceable  rules  and  regu- 
lations as  public  interest  may  dictate. 

In  those  three  resolutions  you  get  our  position  on  the  broad  prin- 
ciple of  Government  control.  Also  we  are  irreconcilable  against 
Government  ownership  or  any  more  interference  of  Government  in 
business  than  is  necessary  to  protect  the  common  masses  or  the  gen- 
eral public  against  extortion  and  exploitation  by  large  capitalistic 
interests. 

Mr.  Gernerd.  Is  your  thought  similar  to  the  Interstate  Commerce 
Commission  regulating  the  railroads — is  that  your  idea  with  regard 
to  the  regulation  of  the  packer  interests  or  things  of  that  kind  ? 

Mr.  Atkeson.  The  packer  proposition  is  fundamentally  different 
from  the  railroads. 

Mr.  Gernerd.  I understand;  but  the  same  principle  applies? 

Mr.  Atkeson.  Yes;  the  same  principle  applies  in  the  effort  to 
restrain  the  monopolistic  power  of  the  packers  or  any  other  large 
capitalization,  that  is,  whenever  the  packers  become  a menace  to 
the  common  welfare,  that  the  Government  should  at  least  restrain 


76 


MEAT  PACKER. 


and  control  them,  even  if  secured  legitimately,  it  is  still  the  duty  of 
Congress  to  restrain  the  greater  power  from  imposing  upon  the  less  ‘ 
powerful  and  more  or  less  scattered  interests  of  all  the  people.  We 
regard  that  as  sound  and  economically  safe,  and  in  accord  with  the 
President’s  statement  that  he  favors  “more  business  in  Government 
and  less  Government  in  business” — just  as  little  Government  in 
business  as  you  must  have  and  at  the  same  time  safeguard  the  ' 
interests  of  the  public. 

Just  one  word  about  the  bill. 

Mr.  Ten  Eyck.  I should  like  to  ask  you  one  question. 

Mr.  Atkeson.  Certainly. 

Mr.  Ten  Eyck.  Is  it  your  idea  that  the  Federal  Trade  Commission 
would  be  as  good  a body  to  supervise  laws  of  this  character  ? 

Mr.  Atkeson.  I am  pretty  well  agreed  with  what  Mr.  Anderson  ,) 
said  yesterday,  that  the  administrative  authority  in  this  legislation 
or  in  similar  legislation  is  not  of  the  first  importance,  it  is  what  is  ■ 
in  the  legislation  itself.  If  I were  the  President  and  wanted  to  give 
big  business  a clear  bill  of  health  and  I had  the  appointive  power  of 
the  Federal  Trade  Commission  I would  know  exactly  how  to  do  it.  | 
I do  not  know  any  power  in  this  Government  that  could  be  used  to 
the  same  extent  of  giving  a clean  bill  of  health  to  the  crooked  business  • 
quite  so  promptly  and  efficiently  as  the  Federal  Trade  Commission,  l 
if  I were  the  President  of  the  United  States.  I do  not  know  whether  ' 
you  agree  with  that  proposition  or  not. 

Mr.  Ten  Eyck.  I want  to  bring  out  your  idea. 

Mr.  Clarke.  The  power  is  tremendous. 

Mr.  Atkeson.  As  President,  I could  get  a Federal  Trade  Commis- 
sion that  would  protect  the  interest  of  the  public  in  the  administra- 
tion of  such  laws  as  Congress  might  enact.  As  to  a choice  between  - 
the  Federal  Trade  Commission,  the  Secretary  of  Agriculture,  and  a : 
special  commission  to  administer  these  laws,  a good  deal  depends — in  ( 
fact,  everything  depends — on  the  personnel  of  those  administrative 
authorities. 

Mr.  Ten  Eyck.  Is  not  the  administration  of  the  law  pretty  nearly 
as  important  as  the  law  itself  ? 

Mr.  Atkeson.  It  is  perhaps  more  important,  because  even  a bad 
law  may  be  well  administered  or  administered  in  the  interest  of  the 
public,  while  a good  law  may  be  nearsightedly  administered. 

Mr.  Ten  Eyck.  In  passing  a law  to-day,  that  law  would  undoubt- 
edly in  some  place  or  paragraph  give  the  administrative  author- 
ity to  some  commission  or  bureau  or  some  other  department  of  the 
Government,  and  that  was  my  idea  in  asking  that  question. 

Mr.  Atkeson.  I understood  your  motive  in  asking  the  question, 
and  that  is  the  reason  why  I was  trying  to  answer  it  frankly.  I 
know  this:  I am  going  to  deal  with  the  situation  as  I would  like  to 
see  Congress.  There  is  a large  prejudice,  if  I may  use  that  word,  or 
disinclination  to  create  new  commissions  with  certain  Members  of 
Congress.  I doubt  the  expediency  of  administering  this  law  by  the 
Federal  Trade  Commission.  I think  the  most  efficient  administra- 
tion would  result  from  a special  commission,  where  the  whole  re- 
sponsibility was  loaded  and  where  you  would  have  a commission 
created  for  that  purpose.  That  would  be  somewhat  expensive,  and  ! 
there  are  plenty  of  arguments  against  it;  but  my  first  choice  would 


MEAT  PACKER.  77 

be  an  independent  commission.  I would  like  to  be  the  President 
just  long  enough  to  appoint  the  members  of  that  commission. 

Mr.  McLaughlin  of  Nebraska.  Right  there,  you  made  the  state- 
ment that  that  commission  would  probably  be  somewhat  expensive. 

Mr.  Atkeson.  Yes,  sir. 

Mr.  McLaughlin  of  Nebraska.  I want  to  ask  you  this  question. 

Mr.  Atkeson.  Very  well. 

Mr.  McLaughlin  of  Nebraska.  If  such  a law  is  to  be  effectively 
administered  is  it  going  to  cost  any  more  to  support  a new  commis- 
sion than  it  would  the  Federal  Trade  Commission  or  the  Department 
of  Agriculture  or  any  other  department  ? 

Mr.  Atkeson.  I doubt  whether  it  would.  If  the  Secretary  of 
Agriculture  undertook  to  administer  it  he  would  have  to  have  ad- 
ministrators. 

Mr.  McLaughlin  of  Nebraska.  Absolutely. 

Mr.  Atkeson.  He  could  not  do  it,  and  it  might  cost  more  to  start 
it.  I can  not  answer  that  question,  but  I would  call  your  attention 
to  the  fact  that  my  first  choice  would  be  a separate  commission  and 
my  second  choice  would  be  the  Secretary  of  Agriculture.  Assuming 
that  the  Senate  passes  a bill  providing  for  a special  commission,  as 
they  did  before,  and  that  the  House  is  likely  to  pass  a bill  providing 
for  its  administration  by  the  Secretary  of  Agriculture,  then  taking 
that  viewpoint,  I want  to  call  your  attention  to  one  feature  of  what 
is  commonly  known  as  the  Haugen  bill: 

Beginning  in  section  302  on  page  12,  as  I have  studied  this  bill 
I fail  to  see  any  reason  for  introducing  two  administrative  factors  or 
authorities.  Maybe  I am  entirely  at  sea  in  regard  to  the  matter,  but 
if  I were  writing  this  bill  I would  substitute  for  “ Interstate  Commerce 
Commission, ” “ Secretary  of  Agriculture”  clear  through.  The  result 
of  my  own  cogitation  over  the  matter  is  in  line  with  the  statement 
made  by  Mr.  Anderson  yesterday. 

The  Chairman.  Mr.  Atkeson,  it  is  true  that  the  Department  of 
Agriculture  has  a large  force  of  employees  in  the  packing  houses. 
It  is  also  true  that  the  stockyards  and  the  stockyard  service  are  a 
part  of  commerce.  The  question  with  the  committee  was  whether 
it  should  be  subject  to  the  Interstate  Commerce  Commission  or 
the  Secretary  of  Agriculture,  whether  it  should  be  under  one  head 
or  should  be  divided.  We  invited  the  members  of  the  Interstate 
Commerce  Commission  to  appear  before  the  committee,  and  the 
members  of  the  Interstate  Commerce  Commission  made  it  clear  that 
they  would  be  willing  to  take  over  the  stockyards,  as  that  is  a part 
of  the  transportation  service,  but  they  did  not  think  they  should 
take  over  the  packers,  and  for  that  reason  they  should  be  placed 
under  some  other  control.  Acting  upon  their  suggestion,  the  sub- 
committee decided  upon  turning  the  stockyards  and  the  stockyard 
service  over  to  the  Interstate  Commerce  Commission;  and  then  there 
was  a question  whether  the  packers  should  be  under  the  jurisdic- 
tion of  the  Federal  Trade  Commission  or  the  Secretary  of  Agri- 
culture. After  giving  it  due  consideration,  it  was  thought  that  as 
the  Department  of  Agriculture  already  provides  a large  force  in  the 
packing  establishments,  and  the  further  fact  that  it  had  corrected 
a great  many  evils — as  you  well  know,  they  have  collected  millions 
of  dollars — I should  not  say  millions  of  dollars,  I do  not  know,  but 


MEAT  PACKER. 


78 

large  amounts  for  the  shippers.  I had  one  check  go  through  my 
office  for  over  $900  for  excess  charges  for  fees  and  service  in  the 
stockyards — with  the  machinery  which  they  had  and  the  splendid 
work  the  department  has  done,  it  was  thought  that  the  Department 
of  Agriculture  was  the  proper  one. 

There  was  a difference  of  opinion,  many  preferred  the  Federal 
Trade  Commission.  I agree  with  your  view  that  the  commission 
has  been  very  active  and  has  been  prompt  in  making  its  reports, 
but  with  our  experience  with  Government  control  I think  you  will 
agree,  all  will  agree,  that  control  by  any  commission  has  not  been 
satisfactory.  If  you  speak  about,  conspiracy  or  profiteering  you  can 
take  the  reports  and  find  that  profiteering  and  conspiracy  went  on 
under  Government  control  as  they  did  before;  they  were  not  ham- 
pered or  restricted  very  much,  but  the  Secretary  or  the  Department 
of  Agriculture  has  corrected  a great  many  evils. 

Mr.  Clague.  Is  there  any  reason  why  it  should  not  be  the  Secretary 
of  Agriculture,  which  would  obviate  the  possibility  of  duplicating 
a lot  of  work  ? We  tried  to  get  through  a bill  yesterday  which  would 
make  the  different  bureaus  function.  If  you  create  another  board 
then  you  are  creating  a department  which  would  have  to  go  over  and 
do  a lot  of  work  done  by  the  Secretary  of  Agriculture  and  if  placed 
under  his  charge  we  would  not  have  that  duplication  of  work. 

The  Chairman.  If  you  give  it  to  a new  commission  or  to  the  Inter- 
state Commerce  Commission  then  you  will  duplicate  much  work, 
because  the  activities  of  the  Agricultural  Department  are  already  in  j 
the  packing  houses.  It  is  a matter  to  which  the  committee  has  given 
a great  deal  of  consideration  and  were  undecided  about  it,  but  finally 
came  to  this  conclusion.  There  are  three  ideas,  one  to  create  a new 
commission,  the  other  is  to  turn  the  work  over  to  the  Federal  Trade 
Commission,  and  the  other  is  to  turn  the  work  over  to  the  Secretary  j 
of  Agriculture.  I think  that  is  the  only  difference  there  is  which  ( 
exists  between  some  of  these  bills. 

Mr.  Atkeson.  Mr.  Chairman,  I was  considering  this  bill  purely 
from  the  standpoint  of  its  being  administered  by  the  Secretary  of  : 
Agriculture. 

I amused  myself  sometime  ago  in  preparing  a packer  bill,  but  I 
did  not  have  the  nerve  to  ask  any  Congressman  to  introduce  it 
because  I did  not  think  that  Congress  would  pass  the  bill  if  I did,  but 
it  provided  that  the  railroads  should  own  the  stockyards.  That  is 
our  disposition  of  the  stockyards  problem.  That  means,  of  course, 
that  they  would  be  brought  under  the  Interstate  Commerce  Commis- 
sion for  administration,  but  as  I have  studied  Mr.  Haugen’s  bill,  if 
the  railroads  are  not  to  own  the  stockyards,  and  it  does  not  so  provide, 
it  then  seemed  to  me  that  if  this  law  is  to  be  administered  by  the 
Secretary  of  Agriculture  that  the  Secretary  of  Agriculture  should  be 
given  administrative  authority  over  the  stockyards,  including  the 
commission  men  and  all  other  things  that  pass  through  the  stock- 
yards.  This  is  not  intended  as  a criticism  at  all.  Maybe  I am  mis- 
taken about  it.  If  I were  suggesting  any  changes  in  this  bill  it  would 
simply  be  that  change,  that  the  11  Secretary  of  Agriculture”  be  sub- 
stituted for  the  “ Interstate  Commerce  Commission”  throughout  the 
bill  beginning  with  section  302.  That  is  a mere  suggestion. 

Then,  I should  like  to  ask  the  chairman  why  he  included  in  the 
definition  of  Hive  stock”  mules  and  horses? 


MEAT  PACKER. 


79 


The  Chairman.  Because  they  have  been  included  under  the  meat 
ispection  act  recently. 

Mr.  Atkeson.  They  may  be  dealt  in,  perhaps,  that  is  the  reason. 
The  Chairman.  The  packers  now  kill  horses  and  goats. 

Mr.  Atkeson.  I do  not  imagine  that  they  buy  many  mules  and 
orses  in  the  packing  houses  ? 

The  Chairman.  Oh,  yes;  they  do. 

Mr.  Atkeson.  I just  asked  that  question, 
i The  Chairman.  The  Federal  inspection  provides  for  that  and  for 
hat  reason  it  was  done.  I do  not  think  the  committee  thought  it 
ras  very  important. 

Mr.  Atkeson.  Just  one  word  and  I will  be  through.  I have  taken 
wicq  as  much  time  as  I wanted  to. 

I believe  psychologically  as  well  as  economically  that  the  time  has 
ome  to  put  on  the  statute  books  as  constructive  a piece  of  legisla- 
ion  as  this  Congress  can  put  through  to  allay  the  state  of  public 
lind.  I believe  it  would  be  good  for  business,  I think  it  would  be 
ood  for  the  common  welfare.  Of  course,  it  should  be  a constructive 
iw,  without  any  malicious  intent  to  do  anybody  any  harm  or  any 
pecial  interest  any  good  but  in  the  interest  of  the  common  welfare, 
t seems  that  the  best  bill  that,  in  your  wisdom,  you  can  put  on  the 
tatute  books  would  be  worth  while  at  this  time.  For  myself,  after 
hese  10  or  12  years  of  wrestling  with  this  problem  it  has  become 
auseous  like  some  of  the  pieces  of  meat  we  get  from  the  packers, 
have  gotten  tired  of  it.  Those  who  have  been  on  the  committee 
nd  heard  me  talk  about  these  things  before  have  probably  gotten 
Ted  of  my  talk.  I want  to  relieve  myself,  you  people,  and  the 
ublic,  and  I would  be  glad  if  Congress  would  put  on  the  statute 
ook  the  very  best  possible  constructive  piece  of  legislation  that  it 
; possible  for  them  to  enact. 

Mr.  Ten  Eyck.  You  made  the  statement  that  personally  you  felt 
hat  the  stockyards  should  be  owned  by  the  railroads  ? 

Mr.  Atkeson.  Yes,  sir. 

Mr.  Ten  Eyck.  Do  I follow  your  mind  along  this  line  that  the 
3ason  for  that  is  the  same  reason  that  they  now  own  the  freight 
ouses  ? 

Mr.  Atkeson.  That  is  right.  It  is  a part  of  the  transportation 
usiness  rather  than  the  packing  business.  That  is  foreign  to  any- 
hing  that  we  are  likely  to  do. 

Mr.  Ten  Eyck.  Yes;  I merely  asked  the  question  for  information. 
Mr.  Atkeson.  I thank  you,  Mr.  Chairman  and  gentlemen  of  the 
lommittee. 

The  Chairman.  We  will  now  hear  Mr.  Marsh. 

| Mr.  Marsh.  Mr.  Chairman,  I want  to  make  reference  to  a number 
if  papers  and  do  you  mind  if  I sit  down? 

[ The  Chairman.  No,  sir. 

It  is  now  10  minutes  after  12  o’clock,  and  what  is  the  pleasure  of 
he  committee?  Shall  we  take  a recess  and  go  on  at  2 o’clock? 

Mr.  Marsh.  Whatever  time  meets  the  convenience  of  the 
lommittee. 

The  Chairman.  Without  objection,  the  committee  will  take  a 
ecess  until  2 o’clock  p.  m. 

(Thereupon,  the  committee  took  a recess  until  2 o’clock  p.  m.) 


80 


MEAT  PACKER. 


AFTER  RECESS. 


The  committee  reconvened  at  2 o’clock  p.  m.,  pursuant  to  recess, 
Hon.  Gilbert  N.  Haugen  (chairman)  presiding. 

The  Chairman.  The  committee  will  come  to  order.  The  committee 

will  hear  Mr.  Marsh  first. 


STATEMENT  OF  ME.  BENJAMIN  C.  MARSH,  REPRESENTING 
FARMERS’  NATIONAL  COUNCIL,  BLISS  BUILDING,  WASH- 
INGTON, D.  C. 


Mr  Marsh.  Mr.  Chairman  and  gentlemen  of  the  committee,  I am  I 
appearing  on  behalf  of  the  Farmers’  National  Council  and  the  Peoples 
Reconstruction  League.  The  Peoples’  Reconstruction  League  is  a 
nonpartisan  union  of  National  and  State  progressive  farm  and  labor 
organizations,  including  several  large  railway  brotherhoods  and  a 
number  of  the  crafts,  and  also  the  general  public 

I want  to  discuss  in  detail  and  specifically,  Mr.  Chairman  and 
o-entlemen  of  the  committee,  with  your  permission,  some  of  the 
principles  of  packer-control  legislation.  In  your  bill— and  I am  sure 
you  will  understand,  Mr.  Chairman,  that  m making  these  criticisms, 
we  mean  nothing  personal  at  all  but  are  simply  trying  to  address  our 
selves  to  the  mints  of  the  proposal.  In  your  own  bill  there  is  no. 
provision  as  we  understand  it  for  current  supervision  or  registration 
of  the  packers.  But  your  bill  defines  a number  of  illegal  practices.. 
For  instance,  in  section  203,  on  page  4,  it  is  provided— 

It  shall  be  unlawful  for  any  packer  to  (a)  engage  in  or  use  any  unfair,  unjustly  dis- 
criminatory,  or  deceptive  prac  tice  or  device  m commerce. 

Bv  reference  to  the  perpetual  injunction  issued  by  the  Supreme 
Court  in  1903  and  modified  by  the  mandate  of  that  court  ml 
will  see  that  it  is  to  exactly  the  same  effect.  In  that  mjmiction  toe 
packers— and  of  course  this  injunction  applies  to  all  packers  but  morft 
particularly  to  those  more  directly  concerned  now  in  the  matter  ot 
the  proposed  legislation  pending  before  this  committee  in  that, 
injunction  they  were  prohibited  in  vigorous,  plain  Anglo-Saxon 
language  from  directing  or  requiring  their  respective  agents 


ln\  To  refrain  from  bidding  against  each  other  in  the  purchase  of  live  f stock;  or 
(6)  coUusively,  and  by  agreement,  to  refrain  from  bidding  against  each  other  at  t e 
sales  of  live  stock. 


And  the  said  injunction  continued  along  that  general  1 • 

think  many  of  the  members  of  this  committee  are  familiar  with  that 
injunction  J and  if  it  had  been  enforced  it  seems  to  us  it  would  largely, 

have  made  such  legislation  as  is  here  proposed  unnecessary. 

„ . . • i*  • i-  ~ 4 T TrnoVi  hruiof  r.n  voiir  at 


But*e  interesting  point  that  I wish  to  bring  to  your  attention 


IS 


that  there  does  not  seem  to  be  a court  of  law  or  any  other  power  up 
to  this  date  in  the  United  States  which  can  control  the  packers-.! 
mean,  under  our  present  ignorance  from  day  to  day  and  month  t j 
month  and  year  to  year  of  what  they  are  doing.  i i j 

Therefore  we  very  strongly  recommend  not  only  that  there  shou 
be  in  Law  that  these  things  should  be  unlawful  and  it  is  unlawiu 
to-day  for  the  packers  to  do  these  things  but  the  means  should  bei 
provided  whereby  they  may  be  properly  dealt  with. 


MEAT  PACKER. 


81 


If  I may  refer  to  a little  of  your  own  testimony,  in  part  31  of  the 
hearings  held  a year  ago  almost  exactly,  this  question  was  asked — 

The  Chairman.  I understood  you  to  say  that  no  business  man  had  ever  been  sent 
to  jail;  you  had  reference  then  to  the  packers,  of  course? 

Attorney  General  Palmer.  I think  that  is  correct. 

The  Chairman.  The  question  then  is,  why  others  are  sent  to  jail  in  large  numbers, 
and  why  prosecutions  are  successful  as  to  one  and  not  to  another. 

Attorney  General  Palmer.  Under  the  Sherman  Anti-Trust  law? 

The  Chairman.  Any  law. 

Attorney  General  Palmer.  Don’t  misunderstand  me,  Mr.  Chairman. 

The  Chairman.  If  it  is  possible  to  convict  others,  isn’t  it  possible  to  make  a law  to 
convict  the  packers? 

You  may  remember  that  discussion,  which  I am  going  into,  and 
while  I will  not  take  the  time  to  read  the  record  I can  give  references 
if  the  committee  want  them.  The  Attorney  General  admitted  that 
in  his  judgment  there  was  cause  for  action  against  the  packers; 
when  he  agreed  to  the  terms  of  the  decree  with  the  packers  he  practi- 
cally admitted  that  they  had  violated  the  law. 

Therefore  it  does  not  seem  to  us  that  it  is  sufficient  to  merely 
enumerate  the  things  which  the  packers  should  not  do,  because 
unless  you  have  actual  control  over  them  and  knowledge  from  day 
to  day  of  what  they  are  doing,  they  will  do  it  and  get  by  with  the 
doing  of  it.  They  had  this  collusive  agreement  with  the  Attorney 
General,  which  was  certainly  against  public  policy — and  we  said  so 
at  the  time,  and  said  so  even  to  the  Attorney  General.  We  said 
that  it  was  improper  to  enter  into  an  agreement  with  the  packers 
if  they  had  done  nothing,  and  that  if  they  had  broken  the  law  they 
should  be  prosecuted. 

The  packers  are  not  afraid  of  any  antitrust  law — or,  I say,  they  do 
not  seem  to  have  any  fear  of  such  a law.  And  why?  Because  of 
their  experience  with  such  laws  in  the  past.  They  certainly  do  not 
seem  to  have  any  fear  of  such  laws.  What  they  are  afraid  of  is 
some  one  knowing  what  their  business  really  is.  That  is  the  reason 
why  they  denounced  the  Federal  Trade  Commission  for  its  full, 
impartial,  and  accurate  investigation  of  the  meat-packing  indus- 
try. And  that  is  the  reason  the  super  government  of  the  United 
States,  the  United  States  Chamber  of  Commerce,  came  to  the  de- 
fense of  the  packers  and  attacked  the  Federal  Trade  Commission 
for  showing  up  the  facts. 

Now,  Mr.  Chairman  and  gentleman  of  the  committee,  the  very 
opposition  as  we  view  it,  the  very  objections  which  tbe  packers 
made  to  the  investigation  by  the  Federal  Trade  Commission,  is  an 
argument  for  a distinct  and  separate  commission  to  be  charged 
with  the  supervision  of  the  conduct  of  the  business  of  the  big 
packers,  and  of  those  others  who  are  included  in  this  bill  and  are 
to  come  under  the  supervision  of  such  a commission,  or  of  any  of 
these  bills  providing  for  supervision  by  the  Secretary  of  Agriculture 
or  the  Federal  Trade  Commission  or  a separate  commission. 

It  seems  to  us  that  it  would  be  perfectly  futile  merely  to  write  into  a 
law  that  something  is  illegal  that  the  Supreme  Court  has  already  de- 
clared to  be  illegal  and  has  enjoined  the  packers  from  doing.  Therefore 
we  very  strongly  urge  that  in  drafting  packer-control  legislation  you 
shall  provide  a separate  commission;  and  I would  like  to  take  up 
the  reasons  for  that  kind  of  control. 


46985—21 6 


82 


MEAT  PACKER. 


In  the  first  place,  the  packers  have  had  a long  and  unenviable 
record.  They  have  been  thoroughly  investigated.  The  public  has 
been  aroused  and  is  aroused  now  to  the  need  for  some  control  over  j 
the  meat-packing  industry.  Probably  you  will  recall  the  Weekly 
News  Letter  of  the  United  States  Department  of  Agriculture  of 
February  16,  this  year,  in  which  it  calls  attention  to  the  big  decrease 
in  live  stock  on  farms  during  the  last  year.  It  reports  nearly 
10,000,000  less  head  on  January  1,  1921,  than  on  the  same  day  in 
1920.  The  reduction  in  milch  cows  was  298,000,  for  cattle  1,180,000, 
swine  5,078,000,  and  sheep  decreased  2,047,000. 

Now,  Mr.  Chairman  and  gentlemen  of  the  committee,  that  indi- 
cates an  extremely  serious  situation  in  agriculture,  and  fully  as  serious, 
as  we  all  realize  I believe,  for  the  consumers  of  live  stock  and  meat 
products  in  the  cities  and  everywhere  else. 

The  vastness  itself  of  the  meat-packing  industry  and  its  ramification 
into  a great  many  industries,  unrelated  lines,  which  we  do  not  believe  3 
has  been  entirely  stopped  by  the  consent  decree,  requires,  in  our 
judgment,  more  attention,  more  careful  study,  than  the  Secretary  of 
Agriculture,  through  subordinates,  can  give  to  it. 

I want  it  distinctly  understood  that  this  statement  is  in  no  way 
intended  as  a criticism  of  the  Secretary  of  Agriculture.  But  a busi- 
ness like  that  of  the  meat  packers,  which  for  12  years  has  been  able 
to  defeat  any  and  every  effort  to  find  out  the  facts  about  them,  as 
far  as  Congress  is  concerned,  and  to  prevent  the  enactment  of  any 
legislation  by  the  Congress,  is  too  complex  and  too  big  a concern  for  ' 
any  subordinate  in  any  department  of  the  Government  to  handle,  in 
our  judgment. 

I want  you  to  note  the  fact  that  the  investigation  made  by  the 
Federal  Trade  Commission  was  not  the  result  of  a resolution  adopted 
by  the  Congress,  but,  as  you  will  recall,  was  because  of  specific  and  ; 
direct  instructions  by  the  President  of  the  United  States  to  the  Fed-  j 
eral  Trade  Commission. 

The  Chairman.  One  investigation  was  in  response  to  a resolution  5 
of  the  Senate,  was  it  not  ? 

Mr.  Marsh.  One  whitewash  investigation,  yes;  but  no  real  invest  ; 
tigation  was  ever  made  until  that  made  by  the  Federal  Trade 
Commission. 

Mr.  Jones.  There  are  certain  duties  that  are  charged  to  the  Federal 
Trade  Commission  that  cover,  at  least  in  part,  the  packing  industry 
as  well  as  some  other  industries.  Do  not  you  think  if  you  create  a 
commission  you  ought  to  take  away  all  of  the  powers  of  the  Federal 
Trade  Commission  with  reference  to  the  packers  ? In  other  words, 
will  not  you  waste  in  large  measure  what  the  Federal  Trade  Com- 
mission has  done,  or  at  least  duplicate  its  activities  or  necessarily 
complicate  the  authority  and  duties  of  the  Federal  Trade  Commis- 
sion in  so  far  as  they  cover  the  field  of  the  packers,  should  you  have  a 
separate  commission? 

Mr.  Marsh.  The  function  of  the  Federal  Trade  Commission  up  to 
date  has  been  largely  one  of  investigation  of  complaints. 

Mr.  Jones.  Investigations  of  complaints  will  always  precede  action  ? 

Mr.  Marsh.  Yes.  But  I want  them  to  keep  at  that.  They  have  a 
lot  more  of  that  to  do.  They  have  made  about  as  complete  an  in- 
vestigation as  can  be  made,  but  there  is  more  to  be  done  along  other 


MEAT  PACKER. 


83 


lines.  They  have  made  certain  recommendations  for  dealing  with 
the  evils  they  found  to  esxit  in  the  meat  packing  industry. 

In  our  opinion,  and  I presume  your  consideration  of  this  legislation 
indicates  that  you  agree  that  the  consent  decree  does  not  settle  the 
packer  situation,  we  have  got  to  have  legislation.  So  far  as  the 
Federal  Trade  Commission  is  concerned  it  has  to  do  a lot  of  other 
things.  There  is  the  steel  trust  which  is  on  for  a good  investigation, 
and  the  coal  trust,  and  all  the  other  trusts. 

Mr.  Jones.  There  is  a limit  to  Government  activity.  You  would 
not  advocate  a separate  commission  to  deal  with  every  big  business, 
would  you  ? 

Mr.  Marsh.  I think  we  have  to  proceed  in  government  more  or  less 
along  experimental  lines.  You  are  asking  me  some  particular  ques- 
tions which  I will  answer  you  from  a personal  standpoint,  if  I may . 
Personally  I do  not  think  you  need  to  have  a separate  commission  for 
leverv  big  industry.  But  here  we  have  an  industry  that  vitally  affects 
fevery  person  in  the  country,  both  producer  and  consumer.  And 
there  is  such  utter  disregard  of  law  by  it  that  it  seems  to  us  with  its 
many  ramifications,  which  include  retailing,  which  include  the  rela- 
tion of  the  packers  to  cooperative  marketing  and  direct  trading,  that 
it  justifies  and  requires  a separate  commission. 

And  in  this  connection  I am  inclined  to  think  that  within  a very 
few  years  we  are  going  to  come  to  adopt  the  principles  of  what  is 
known  as  the  Steele  bill  for  a Federal  licensing  system  under  the 
Federal  Trade  Commission  or  some  analogous  Government  agency. 
Of  course  that  subject  is  not  before  this  committee  now,  but  we  are 
talking  about  this  great  industry  and  its  extended  ramifications,  and 
in  considering  such  a subject  we  have  to  consider  some  experiments. 

I want  to  say  that  personally  I would  not  favor  giving  such  a com- 
mission sumptuary  powers  to  stop  the  packer’s  business  no  matter  what 
his  crime  may  have  been.  He  is  engaged  in  a very  important  business, 
one  which  affects  all  the  people  of  this  country,  and  I would  favor,  no 
matter  what  he  may  do,  that  he  might  have  a proper  investigation, 
and  probably  recourse  within  a reasonable  period  of  time  to  the  courts. 
I think  that  should  be  provided  for. 

In  answer  to  the  question  whether  the  Federal  Trade  Commission 
fas  the  opportunity  and  the  time  to  go  into  this  important  matter 
thoroughly  is  a serious  question  to  consider.  You  have  got  to  have 
men  of  a certain  caliber.  The  Secretary  of  Agriculture  can  not  give 
t his  personal  attention.  If  I understand  the  situation  correctly 
the  members  of  the  Federal  Trade  Commission  can  not  give  much  of 
:heir  individual  time  to  it. 

I Mr.  Jones.  Of  course  there  are  many  things  the  Secretary  of 
Agriculture  can  not  give  his  personal  attention  to,  so  far  as  the 
details  are  concerned,  that  he  must  investigate  and  know  about  and 
,ake  action  upon.  But  he  gets  information  through  various  sources, 
md  could  get  such  information  as  would  bear  upon  this  question  as 
n the  case  of  any  other  question  that  affects  agriculture.  By  pay- 
ng  proper  salaries  he  could  get  just  as  big  men  to  work  under  him  as 
|)n  a separate  commission,  if  the  salaries  paid  would  justify  their 
rendering  that  service.  So  why  could  not  he,  by  virtue  of  having 
mch  men  to  make  an  investigation  and  to  correlate  those  facts  with 
acts  secured  from  other  sources,  be  in  just  as  good  position  to  take 
effective  action  as  a commission  would  be  ? 


84 


MEAT  PACKER. 


Mr.  Marsh.  I conceive  that  he  might  be.  Nor  is  it  fair  to  judge 
from  the  fact  that  a great  many  men  in  the  Department  of  Agricul- 
ture have  gone  from  there  to  very  highly  paid  employment  with  the  ■ 
packers,  there  would  not  be  complete  independence  in  that  depart- 
ment. 

But  let  me  stress  the  matter  again.  We  are  dealing  with  a group 
of  men  who  have  challenged  the  authority  of  the  American  Govern- 
ment time  after  time,  who  have  held  up  action  in  the  Congress  for 
12  years,  who  have  defied  the  courts,  and  who  got  the  Attorney! 
General  to  go  into  an  agreement  with  them.  And  if  you  will  read 
the  Attorney  General’s  admission — and,  of  course,  I refer  to  the  pre-J 
ceding  Attorney  General,  Mr.  Palmer — you  will  realize  that  it  was  a 
very  sorry  procedure. 

Perhaps  you  could  get  five  men  to  go  in  and  work  under  the  Secre- j 
tary  of  Agriculture,  or  the  Federal  Trade  Commission,  and  that 
might  be  the  best  way  to  do  it  ultimately,  but  we  do  not  think  sol 
We  think  that  the  ramifications  of  this  business  are  such  as  to  re-1 
quire  the  full  time  and  attention  of  a separate  commission,  although 
the  Secretary  of  Agriculture  might  well  be  ex-officio  a member  of  the 
commission. 

Mr.  Williams.  You  made  the  statement  that  the  packers  had  de-i 
feated  the  courts.  When  was  that  done,  and  in  what  way  ? 

Mr.  Marsh.  I say  that  was  done,  as  I had  explained  to  the  com-* 
mittee  just  before  you  came  in.  There  was  a temporary  injunction 
issued  on  April  22,  1903,  and  confirmed  by  the  United  States  Supreme' 
Court  on  April  11,  1905,  prohibiting  the  packers — Swift  & Co.,  the' 
Armour  Packing  Co.,  Nelson  Morris,  J.  Ogden  Armour,  Edward  C.; 
Swift,  Ferdinand  Sulsberger,  and  others — from  doing  the  very  things; 
which  the  Federal  Trade  Commission  found  that  they  were  doing.  I 
mean,  that  the  Federal  Trade  Commission  has  recently  found  that; 
they  have  continued  to  do.  They  continued,  according  to  the  report, 
of  the  Federal  Trade  Commission,  to  do  these  things  in  defiance  of} 
the  Supreme  Court,  things  that  would  land  any  poor  man  in  jail.  f 

Mr.  Williams.  That  was  defying  the  Federal  Trade  Commission,.' 
if  anything. 

Mr.  Marsh.  Weil,  the  Federal  Trade  Commission  delivered  the' 
goods. 

Mr.  Jones.  Was  there  any  effort  to  carry  out  this  court  injunction 
and  bring  proceedings  before  it  for  violating  the  injunction? 

Mr.  Marsh.  The  last  record  I remember  was  where  the  Attorney 
General,  in  some  dark  spot,  got  into  conference  with  them.  Will 
you  let  me  read  you  some  of  his  statements  so  they  may  go  into  the 
record  ? 

Mr.  Ten  Eyck.  Was  that  the  fault  of  the  Attorney  General  in 
1903,  because  he  did  not  follow  the  matter  up  at  that  time? 

Mr.  Marsh.  I do  not  know  really  where  the  fault  lies.  I think  it  | 
was  probably  his  fault  as  well  as  the  fault  of  the  last  Attorney! 
General. 

Mr.  Ten  Eyck.  It  would  not  be  the  fault  of  the  last  Attorney 
General  for  something  that  occurred  in  1903  ? 

Mr.  Marsh.  Oh,  no.  It  would  be  his  fault  for  any  failure  to  take 
action  at  that  time,  but  it  was  the  fault  of  the  recent  Attorney  General 
for  not  taking  action  the  year  before  last. 


MEAT  PACKER. 


85 


Mr.  Ten  Eyck.  But  the  case  you  bring  out  here  occurred  in  1903. 
I am  asking  whether  the  Attorney  General  in  1903  was  the  Attorney 
General  at  fault  for  not  taking  action  in  that  case  ? 

Mr.  Marsh.  I should  say  there  was  a continuing  fault,  but  with 
this  qualification  which  I stated  before  you  came  in,  that  merely 
enacting  criminal  laws  and  making  certain  things  crimes,  unless  you 
ban  know  currently  what  is  being  done  by  the  packers,  is  not  worth 
very  much,  in  our  judgment. 

There  was  handed  down  on  yesterday  an  opinion  by  the  Supreme 
Court  that  Congress  has  no  jurisdiction  over  the  amount  of  money 
jthat  can  be  spent  by  a candidate  in  a primary.  That  as  it  seems  to 
[us  is  a most  extraordinary  thing. 

Mr.  Thompson.  That  was  not  the  decision.  They  limited  the 
amount  of  money  any  candidate  could  spend,  not  in  the  aggregate. 
That  was  the  decision. 

Mr.  Marsh.  Well,  it  comes  down  to  the  same  thing. 

Mr.  Williams.  The  court  held  that  the  Congress  did  not  have 
power  to  enact  legislation  regulating  the  powers  over  primaries  in 
the  States.  That  is  a State  function  they  decided. 

Mr.  Jones.  That  was  merely  as  to  the  matter  of  holding  primary 
elections  in  a State. 

Mr.  Marsh.  I was  merely  illustrating  what  happened. 

Mr.  Williams.  You  are  criticising  the  United  States  Supreme 
Court,  it  seems  to  me. 

Mr.  Marsh.  It  seems  a very  strange  reasoning  to  my  mind  that  a 
candidate  for  a national  office  should  not  be  subject  to  national 
legislation. 

Mr.  Williams.  But  if  that  is  the  law  according  to  the  Constitution 
of  the  United  States  isn’t  the  Supreme  Court  doing  perfectly  proper 
and  properly  discharging  its  duty  when  it  announces  the  law  ? 

Mr.  Marsh.  The  thing  I want  to  bring  out  is  that  showing  the  fact 
that  a man  is  spending  these  great  sums  of  money  will  probably  be  as 
effective  in  defeating  him  as  would  the  enactment  of  any  law.  And 
as  to  the  packers,  having  a means  of  getting  and  furnishing  informa- 
tion as  to  what  they  are  doing  will  probably  be  as  effective  in  pro- 
moting the  public  good  as  anything  that  can  be  done.  And  in  this 
connection  I am  urging  a system  of  registration  for  the  packers,  so 
that  we  will  know  currently  what  they  are  doing. 

Mr.  Thompson.  Have  you  read  the  Haugen  bill,  which  is  before 
this  committee  ? 

Mr.  Marsh.  Yes,  sir;  several  times. 

Mr.  Thompson.  What  is  your  opinion  about  it? 

Mr.  Marsh.  Well,  I think  many  of  its  principles  are  very  admirable. 
We  were  discussing  whether  we  want  to  have  a registration  system, 
and  whether  we  want  to  have  current  information  about  what  the 
packers  are  doing  instead  of  making  certain  things  unlawful,  and 
> then  when  the  Secretary  of  Agriculture,  as  is  provided  for  in  this  bill, 
is  informed  he  will  institute  proceedings  against  them. 

Our  idea  is  to  have  complete  and  continuous  control  over  them 
rather  than  to  rely  upon  criminal  prosecution  occasionally. 

On  yesterday  you  had  before  you  Mr.  Wells,  who  told  you  how 
they  were  handling  the  situation  in  the  stockyards  at  South  St.  Paul. 


MEAT  PACKER. 


86 

As  it  seemed  to  me  they  were  handling  their  local  situation  most 
effectively.  We  think  the  same  principle  should  be  applied  to  the 
entire  business  of  the  packers.  There  should  be  some  knowledge, 
currently,  of  what  they  are  doing.  There  should  be  some  registration 
of  them.  The  Government  should  be  in  touch  all  the  time  with 
what  they  are  doing,  not  with  a view  to  instituting  prosecution,  but 
to  holding  them  in  check  and  to  correct  the  evils  as  they  occur. 

Let  me  repeat  again,  as  other  members  have  come  in  since  I began 
my  talk,  and  I do  not  want  an  improper  impression  to  get  out — that 
we  are  not  in  favor  of  sumptuary  or  hasty  legislation. 

Mr.  Thompson.  Do  you  favor  such  legislation  as  has  been  provided 
for  the  Interstate  Commerce  Commission  in  its  control  over  railroads  ? 

Mr.  Marsh.  I am  in  favor  of  such  control  over  the  packers  as  the  : 
Interstate  Commerce  Commission  is  supposed  to  have  over  the  rail- 
roads when  the  Congress  does  not  interfere  with  its  functions  by  such  ■; 
a law  as  the  Cummins-Esch  law. 

The  Chairman.  You  spoke  of  the  investigation  and  report  of  the 
Federal  Trade  Commission.  Isn’t  it  also  true  that  it  was  done  in 
cooperation  with  the  Department  of  Agriculture,  and  that  the 
President  ordered  that  it  should  be  done  in  cooperation  with  that 
department  ? 

Mr.  Marsh.  I think  not. 

The  Chairman.  Let  me  read  you  from  the  President’s  letter: 

The  Department  of  Agriculture  has  been  engaged  for  several  years  in  studying  \ 
problems  of  distribution.  I have  noted  that  it  has  been  proposed  in  the  Congress  to  i 
add  to  the  funds  of  the  department  and  give  it  larger  powers  to  conduct  its  investiga-  ? 
tions.  As  its  activities  will  touch  phases  of  the  problem  I am  calling  to  your  attention  . 
which  may  not  be  covered  by  your  inquiry,  and  may  furnish  information  of  great  ; 
importance  for  the  purposes  contemplated,  I shall  direct  that  department  to  cooperate 
with  you  in  this  enterprise. 

Mr.  Marsh.  That  referred  to  the  investigation,  if  I understand  it. 

The  Chairman.  Yes.  But  isn’t  it  a fact  that  the  Department  of  ] 
Agriculture  has  been  instrumental  in  eliminating  more  evils  than  any  , 
other  department  we  have,  particularly  in  the  matter  of  the  stock-  \ 
yards  ? 

Mr.  Marsh.  You  mean  more  evils  in  connection  with  the  packing 
industry  ? 

The  Chairman.  Well,  in  connection  with  the  stockyards  and  the 
packing  business.  The  packers  operate  all  of  the  stockyards  ? 

Mr.  XIarsh.  You  are  speaking  about  a matter  and  asking  me  to 
make  comparisons  which  may  be  regarded  as  invidious  and  dis- 
tasteful to  other  departments. 

The  Chairman.  It  is  due  to  that  department’s  activity  that  I 
should  say  this.  I am  not  charging  that  any  other  department 
might  not  have  accomplished  as  much,  but  owing  to  its  activity  the 
Department  of  Agriculture  has  accomplished  more  perhaps  than  any  j 
other  agency  we  have. 

Mr.  Marsh.  Answering  your  question  very  directly  I will  say  I 
can  not  agree  with  you. 

The  Chairman.  Well  there  are  many  people  who  will  agree  with 
that  statement. 

Mr.  Marsh.  Very  well.  Continuing,  the  Federal  Trade  Commission 
received  its  instructions  to  undertake  this  investigation  on  February 
7,  1917,  and  they  made  their  report  under  date  of  July  3,  1918.  I 


MEAT  PACKER. 


87 


know  that  I personally  tried  to  get  from  the  Department  of  Agri- 
culture what  they  were  going  to  do  about  this  investigation  of  the 
live  stock  end  of  it  but  could  not  drag  it  out  of  them.  Do  you 
know  whether  they  have  made  any  formal  report  on  that  subject 
yet? 

The  Chairman.  I say  they  are  cooperating  with  the  Federal 
Trade  Commission,  and  have  been  doing  so  all  these  years,  and  we 
have  made  appropriations  for  that  purpose. 

Mr.  Marsh.  But  they  did  not  report  in  that  investigation  which 
they  were  ordered  by  the  President  to  make.  That  is  the  point  I 
am  trying  to  stress.  Why  did  they  hold  it  up  ? We  made  an  effort 
in  the  Farmers’  National  Council,  and  have  not  succeeded  in  getting 
full  information  yet  from  the  Department  of  Agriculture  as  to  the 
! cost  of  production,  and  only  recently  have  we  received  some  tenta- 
tive report,  but  not  a satisfactory  one. 

The  Chairman.  They  are  engaged  in  a number  of  activities. 

Mr.  Marsh.  Yes;  and  it  is  because  of  that  we  have  assumed,  and 
I think  correctly,  that  the  supervision  of  this  vastly  important 
industry  should  be  vested  in  a separate  commission  which  does  not 
have  to  take  up  all  the  activities  and  engage  in  all  of  the  work  that 
is  done  by  the  Department  of  Agriculture. 

The  Chairman.  I do  not  want  to  rob  the  Federal  Trade  Commis- 
sion of  any  credit  that  may  be  due  that  commission,  but  simply 
wanted  to  get  before  you  that  the  Department  of  Agriculture  has 
| been  instrumental  in  bringing  about  certain  results. 

Mr.  Marsh.  Well,  I can  not  concede  for  a moment  that  the  De- 
partment of  Agriculture  has  rendered  any  service  in  this  respect. 
It  seems  to  me  that  they  have  almost  tied  up  the  Federal  Trade 
Commission  in  this  investigation.  I do  not  mean  to  be  captious  in 
my  criticism,  but  that  is  the  only  conclusion  I can  reach. 

Mr.  As  well.  Why  not  turn  this  matter  over  to  the  Federal  Trade 
Commission  then  ? 

Mr.  Marsh.  There  has  been  that  suggestion.  Inasmuch  as  you 
were  not  here  at  the  beginning  of  my  statement  I will  repeat  briefly 
what  I said 

Mr.  Aswell  (interposing).  No;  I do  not  want  you  to  repeat  any- 
thing for  my  benefit.  I will  get  it. 

Mr.  Marsh.  We  feel  that  the  Federal  Trade  Commission  now  has 
several  other  great  big  trusts  on  its  hands.  They  have  started  an 
investigation  of  the  Pittsburgh  base,  which  if  carried  out,  will  reach 
into  a great  many  different  lines  of  inquiry,  and  there  is  the  coal 
industry  and  the  harvester  trust. 

Mr.  Aswell.  Have  you  made  any  estimate  of  what  a separate  com- 
mission would  cost  the  Government,  in  the  conduct  of  all  of  its  opera- 
tions and  the  payment  of  salaries  of  its  members  and  employees  ? * 

Mr.  Marsh.  No,  I have  not;  but  I think  this  is  a fair  statement, 
that  it  could  not  be  very  much  larger  than  the  amount  that  would  be 
necessary  in  order  to  do  the  work  in  the  Department  of  Agriculture. 
I doubt  if  it  would  require  very  much  more  money.  The  only  con- 
clusion you  can  reach  is  that  the  Department  of  Agriculture  is  wasting 
money  to-day,  if  you  say  it  would  not  cost  much  more  for  them  to 
supervise  the  packers,  or  I will  not  say  wasting  it,  but  it  is  not  using 
it  as  well  as  it  might. 


88 


MEAT  PACKER 


Mr.  Aswell.  How  many  members  of  such  a commission  do  you 
recommend  ? 

Mr.  Marsh.  I think  there  should  be  a commission  of  at  least  five. 

Mr.  Aswell.  At  a salary  of  $10,000  each? 

Mr.  Marsh.  I should  give  them  at  least  $10,000  each. 

Mr.  Aswell.  And  expenses  ? 

Mr.  Marsh.  Well,  traveling  expenses  in  connection  with  their 
business. 

Mr.  Aswell.  Then  such  a commission  would  cost  the  Government 
several  hundred  thousand  dollars. 

Mr.  Marsh.  It  would  probably  cost  several  hundred  thousand 
dollars.  But  if  it  would  restore  confidence  in  this  country  on  the  part 
of  the  live-stock  producers,  if  it  would  bring  a little  hope  to  the 
3,250,000  or  4,000,000  men  and  their  families  now  out  of  employment 
and  get  us  back  to  normal  conditions,  and  if  we  could  convince  the 
American  people  that  the  American  Government  is  bigger  than  the 
packers,  it  would  be  worth  a million  dollars  a year.  And  that  will 
be  some  job. 

Mr.  Aswell.  Do  you  think  that  the  packers  are  responsible  for  the  . 
present  condition  of  unemployment  ? 

Mr.  Marsh.  No;  I do  not  say  that.  They  have  enough  to  answer  ' 
for  without  laying  to  their  doors  circumstances  over  which  they  have  ; 
no  control. 

Mr.  Williams.  Do  you  believe  that  many  people  think  the  packers  , 
are  bigger  than  the  Government.  ? 

Mr.  Marsh.  I think  there  are  a very  great  many  who  think  so.  i 
Don’t  you  ? 

Mr.  Williams.  I have  never  heard  many  people  express  that 
opinion. 

Mr.  Marsh.  They  have  often  asked  me:  “Why  don’t  you  get  : 
legislation  ?”  I have  recently  spoken  at  Lincoln,  Nebr.,  and  St.  Paul 
and  Minneapolis  and  Chicago  and  Detroit,  and  discussed  this  packer  ! 
situation,  and  they  have  asked  me  time  and  time  again:  “ Why  don’t  *' 
they  enact  packer  legislation?”  What  could  I say  to  them?  ! 

Mr.  Jones.  The  criticism  in  my  part  of  the  country  has  been  not  S 
that  the  Government  is  not  big  enough  to  deal  with  the  question, 
but  the  question  which  engages  the  thought  of  the  people  is:  What 
legislation  is  necessary  ? And  whether  we  can  legislate  and  do  good 
without  doing  more  harm  than  good  to  an  efficient  business  organiza- 
tion. That  is  the  thing  that  is  bothering  the  people  in  my  country. 

Mr.  Marsh.  Where  is  that,  in  Texas  ? 

Mr.  Jones.  Yes;  in  northwest  Texas;  and  I represent  a stock 
country,  too. 

Mr.  Marsh.  Isn’t  it  true  that  the  packers  have  been  down  to 
nearly  every  meeting  of  the  Texas  Cattlemen’s  Association  ? 

Mr.  Jones.  Oh,  yes;  they  always  have  representatives  everywhere, 
you  know,  when  anything  affecting  them  is  going  on.  You  can  not 
criticize  that  on  their  part.  That  is  true  of  every  industry  and  of 
every  set  of  people.  I believe  the  people  of  my  section  of  the  country 
think  that  some  regulatory  legislation  should  be  adopted,  but  they 
do  not  know  what  it  should  be. 

Mr.  Marsh.  And  that  is  the  reason  why  our  people  think  a com- 
mission is  necessary,  because  we  think  it  would  be  the  best  way  to 
get  current  information. 


MEAT  PACKER. 


89 


Mr.  Chairman  and  gentlemen  of  the  committee,  let  me  repeat  that 
we  are  not  suggesting  at  all  that  there  should  be  as  drastic  legislation 
as  has  been  suggested  in  some  of  the  bills  before  the  Congress  on  this 
subject.  We  do  not  suggest  that  the  commission  should  have  power 
to  tell  the  packers  that  they  shall  refrain  from  engaging  in  related 
or  unrelated  businesses.  We  are  believers  in  publicity  in  matters 
affecting  the  public.  Our  proposition  is  to  get  information  currently. 
There  is  sl  big  difference  between  administration  and  legislation.  The 
Congress  can  not  exact  all  details  of  administration.  It  is  hard  to 
set  it  out  in  legislation.  But  you  can  select  a commission  and  in  a 
year  or  so  they  can  collect  a vast  amount  of  information  and  from 
experience  may  modify  some  of  their  practices.  I think  it  is  perfectly 
plain  that  before  rules  and  regulations  are  promulgated,  and  before 
a violation  thereof  is  made  a felony  or  a serious  offense,  and  before 
any  action  could  be  taken  which  would  seriously  handicap  the 
business  of  the  meat  packing  industry — because  that  is  a business 
that  must  continue  uninterrupted — there  should  be  a hearing  at 
which  both  sides  should  be  represented. 

As  to  the  matter  of  registration,  of  course  that  is  not  popular  with 
gentlemen  who  do  not  want  to  be  registered.  I have  observed  that 
prohibition  never  hurt  folks  who  do  not  drink,  and  I have  observed 
that  registration  does  not  hurt  folks  who  have  not  something  they 
want  to  conceal. 

I want  to  make  another  suggestion  right  on  this  point,  Mr.  Chair- 
man. Your  bill  provides,  as  do  some  others,  that  ultimately  there 
shall  be  a uniform  system  of  accounting.  We  think  that  there  ought 
to  be  a definite  provision  in  any  packer  control  legislation  for  installing 
immediately  a system  of  uniform  accounting. 

And  in  this  connection  I just  want  to  read  a little  bit  from  page  37 
of  the  Federal  Trade  Commission’s  report  to  the  President: 

Further  evidence  of  the  existence  of  a conspiracy  among  the  five  big  packers  was 
found  in  the  vault  of  Henry  Veeder,  in  the  form  of  documents  relating  to  funds  main- 
tained by  the  packers  and  oleomargarine  manufacturers,  primarily  for  the  purpose 
of  protecting  themselves  from  punishment  for  the  divers  practices  already  described 
in  part. 

And  the  gentlemen  referred  to  there,  Mr.  Henry  Veeder,  now  sits 
in  this  room. 

These  joint  funds,  as  will  be  shown  in  one  of  the  sections  of  the  report,  were  used: 

To  employ  lobbyists  and  pay  their  unaudited  expenses; 

To  influence  legislative  bodies; 

To  elect  candidates  who  would  wink  at  violations  of  law,  and  defeat  those  pledged 
to  fair  enforcement; 

To  control  tax  officials  and  thereby  evade  just  taxation; 

To  secure  modifications  of  governmental  rules  and  regulations  by  devious  and 
improper  methods; 

’ To  bias  public  opinion  by  the  control  of  editorial  policy  through  advertising,  loans, 
and  subsidies,  and  by  the  publication  and  distribution  at  large  expense  of  false  and 
misleading  statements. 

Mr.  Clarke.  Who  makes  this  report? 

Mr.  Marsh.  The  Federal  Trade  Commission. 

The  Chairman.  Don’t  you  think  this  provision  on  page  10  would 
cover  that? 

Whenever  the  Secretary  finds  that  the  accounts,  records,  and  memoranda  of  any 
packer  do  not  fully  and  correctly  disclose  all  transactions  involved  in  his  business, 
the  Secretary  may  prescribe  the  manner  and  form  in  which  such  accounts,  records, 
and  memoranda  shall  be  kept.  * * *. 


90 


MEAT  PACKER. 


Mr.  Marsh.  You  do  provide  ultimately  for  it,  but  we  suggest  that 
this  be  mandatory  from  the  very  beginning,  because  I assure  you 
that  gentlemen  who  have  to  be  so  carefully  investigated  as  were  the 
packers  by  the  Federal  Trade  Commission  can  conceal  a great  deal, 
so  much  so  that  the  supervising  agency,  and  I do  not  care  whether 
it  be  the  Secretary  of  Agriculture  or  the  Federal  Trade  Commission 
or  a separate  commission,  without  vast  expenditure,  could  not  find 
out  all  that  is  going  on. 

Mr.  Clarke.  Has  this  evidence  been  placed  in  the  hands  of  the 
Department  of  Justice  so  that  it  could  prosecute  the  packers  if  they 
were  resorting  to  illegal  practices  ? 

Mr.  Marsh.  Yes.  And  if  you  will  pardon  me  just  a minute,  I will 
tell  you  what  the  Attorney  General  said. 

Mr.  Clarke.  I don't  care  what  he  said,  what  did  he  do  ? 

Mr.  Marsh.  He  said — 

Mr.  Clarke  (interposing) . Who  was  the  Attorney  General  then  ? 

Mr.  Marsh.  The  Attorney  General  last  year  was  Mr.  Palmer.  But 
the  Attorney  General  in  1903  was  someone  else,  and  I do  not  care  to 
what  political  party  the  Attorney  General  belonged,  because  I do  not 
belong  to  either  political  party,  but  am  nonpartisan. 

Mr.  Clarke.  We  do  not  care  about  that  either.  We  merely  want 
the  facts. 

Mr.  Marsh.  The  decree  was  issued  in  1903  and  made  perpetual  in  s 
1905  by  which  the  Supreme  Court  prohibited  the  packers  from  doing 
what  they  were  doing  right  along.  We  are  not  trying  to  criticize  the  ' 
Attorney  General,  but  to  point  out  the  method  that  has  been  followed 
hitherto  to  make  certain  conduct  an  offense  or  a felony  and  then 
relying  upon  court  action  to  catch  any  great  big  criminal  has  failed. 
In  that  respect  it  has  proved  ineffective.  What  we  have  got  to  have 
is  current  supervision  of  such  vast  aggregations  of  capital. 

And  I am  going  to  state  what  is  a fact,  that  after  the  packers  had  j 
been  convicted — well,  pardon  me,  I will  change  that,  because  it  was  j 
not  in  a court  of  law — but  after  having  been  proven  by  the  Federal  ( 
Trade  Commission  to  have  done  all  these  things  with  their  joint  funds,  ; 
and  here  is  the  pro  rata  distribution  of  the  expenses — that  instead  of  ; 
waiting  for  them  to  do  some  more  of  it  and  hoping  to  detect  them  in 
it,  it  is  essential  that  we  should  have  a uniform  accounting  system 
immediately  installed.  This  is  necessary  in  order  that  we  may  know 
exactly  what  they  are  doing. 

As  Mrs.  Kelley's  testimony  illustrated  this  morning,  suppose  we  had 
a budget  showing  so  much  appropriated  for  the  New  York  papers,  and 
so  much  for  farm  papers,  and  so  much  for  educating  young  women  in 
the  boarding  schools,  and  so  much  for  educating  Congressmen  of 
mature  years,  and  so  much  for  a prohibited  beverage  in  the  New  Wil- 
lard Hotel,  and  all  the  way  along  down  the  line;  suppose  we  had  a 1 
segregated  budget,  and  knew  where  this  money  goes  to,  wouldn't  the 
situation  be  different?  When  I was  here  before  I asked  Mr.  Weld,  of 
Swift  & Co.,  whether  Swift  & Co.  had  any  legislative  fund  and  he 
said  he  did  not  know. 

Mr.  Clarke.  Was  this  money  contributed  from  a common  fund 
or  was  it  contributed  by  certain  packers  ? 

Mr.  Marsh.  The  Federal  Trade  Commission  reports  as  follows: 


MEAT  PACKET. 


91 


In  1917,  for  example,  the  membership  of  the  Oleo  Pool  and  the  percentages  used  in 
collecting  the  joint  funds  were  as  follows: 

Per  cent. 


A.  (Armour  & Co.) 12.  387 

F.  (Friedman  Manufacturing  Co.) 6.  246 

J.  (John  F.  Jelke  Co.) 32. 172 

M.  (Morris  & Co.) 10.  481 

W.  J.  M.  (W.  J.  Moxley  (Inc.)) 11.563 

W.  (Wilson  & Co.  (Inc.)) 4.  265 

H.  (G.  H.  Hammond  Co.) 3.  652 

S.  (Swift  & Co.) 19.  234 


Let  me  read  you  this  very  nice  letter  from  Mr.  Alfred  R.  Urion, 
former  general  counsel  for  Armour  & Co.,  to  Henry  Veeder: 

I give  you  the  following  information  to  be  disseminated  amongst  those  who  are 
associated  with  us  in  Pennsylvania  oleomargarine.  The  source  of  my  report  you  are 
familiar  with.  I give  you  letter  on  the  subject  received  Saturday: 

“Have  been  given  positive  assurance  by  the  big  man  that  there  will  not  be  any 
suits  brought  in  this  State  during  the  time  named  on  tinted  goods,  provided  they  are 
not  too  yellow;  that  is  to  say,  you  must  not  go  to  extremes  in  color,  but  that  the  regular 
run  of  tinted  goods  will  be  all  right.  The  wholesalers  and  manufacturers  should  not 
go  further  in  spreading  the  understanding  than  to  simply  notify  their  trade  verbally 
that  no  suits  will  be  brought  and  that  there  will  be  no  trouble  in  their  handling  natural 
tinted  goods.” 

I have  gone  back  to  the  party  by  letter  and  asked  to  get  a definite  statement  from 
the  big  man,  calling  off  the  State  agents  from  taking  samples  and  frightening  the 
trade,  and  have  no  doubt  will  receive  a favorable  answer  thereto. 

Now,  Mr.  Chairman  and  gentlemen  of  the  committee,  we  submit 
that  in  the  light  of  that  information  and  the  proven  facts,  although 
the  name  was  not  disclosed,  and  it  does  not  need  to  be,  that  you 
should  have  a uniform  system  of  accounting  required  of  these  packers 
before  you  can  have  any  effective  control  over  them  and  know  what 
they  are  doing  with  their  money.  If  they  are  so  poor  how  do  they 
subsist  ? If  they  are  as  poor  as  they  claim  to  be  could  they  continue 
without  legislation  to  help  them  ? If  they  are  as  rich  as  they  claim 
to  be  when  selling  stocks  and  bonds,  as  rich  as  they  were  when  the 
representative  of  Armour  & Co.  went  to  see  the  representatives  of 
the  Federal  Trade  Commission  and  tried  to  get  the  examination  called 
off  so  as  to  escape  some  of  their  income-tax  payments,  then  let  us 
have  some  legislation  in  their  favor  to  give  them  relief.  But,  seri- 
ously, the  farmers,  who  are  in  a bad  fix,  are  entitled”  to  some  relief 
from  this  situation. 

Mr.  Aswell.  If  the  Congress  were  to  remove  the  tax  from  oleo- 
margarine there  would  be  no  necessity  for  all  this  investigation,  would 
there  \ 

Mr.  Marsh.  There  is  something  far  more  important  than  that. 
They  are  selling  adulterated  goods  as  butter,  and  thereby  injuring  the 
legitimate  dairy  industry  and  requiring  the  consumer  to  pay  a price 
sufficient  to  buy  good  butter  for  inferior,  I will  not  say  poisonous, 
oleomargarine. 

Mr.  Aswell.  Your  statements  do  not  agree  at  all  with  the  state- 
ments of  the  scientific  world  about  oleomargarine.  Besides,  if  you 
were  to  remove  the  tax  and  let  all  go  in  at  the  same  price  there  would 
be  no  attempt  to  color  it.  The  pure-food  law  would  cover  that. 

Mr.  Marsh.  I think  the  gentleman  is  wrong  on  the  subject,  and 
the  packers  manufacture  a very  large  proportion  of  the  oleomargarine 
sold  in  this  country. 


92 


MEAT  PACKER. 


The  Chairman.  If  we  are  to  go  into  a discussion  of  oleomargarine 
I am  afraid  it  will  take  up  a lot  of  time.  Let  us  confine  ourselves  to 
the  packer  bills  now  before  the  committee. 

Mr.  Marsh.  Mr.  Chairman,  I will  be  very  glad  to  give  one  or  two 
references  to  what  the  Attorney  General  found  about  the  packers. 
Mr.  Voigt,  at  the  hearings  before  your  committee  held  in  April, 
1920,  asked  some  questions  of  the  Attorney  General,  and  the  latter 
made  this  answer  with  reference  to  his  investigators  and  attorneys: 

They  were  of  the  opinion  that  all  the  facts  relative  to  division  of  territory  and 
division  of  production,  and  so  forth,  and  the  distribution  and  sale,  all  taken  together, 
presented  a case  which  justified  the  department  in  asking  for  a decree  to  restrain 
them  from  monopoly  or  combination  in  restraint  of  trade. 

Before  the  Senate  Committee  on  Agriculture  and  Forestry  the 
Attorney  General  said,  in  answer  to  a question  by  Senator  Norris, 
speaking  of  the  packers: 

I think  they  have  violated  the  Sherman  antitrust  law;  that  is  both  a criminal  and 
a civil  statute,  Senator. 

Then  he  continues 

Mr.  Clarke  (interposing).  You  are  referring  now  to  Mr.  Palmer?  ■ 

Mr.  Marsh.  Yes,  sir. 

Mr.  Clarke.  Continue  your  answer. 

Mr.  Marsh.  The  Attorney  General  continued:  j 

I say  very  frankly — I do  not  want  you  to  mistake  my  conclusions — I have  never 
said  a word  about  criminal  prosecution,  but  having  forced  them  into  the  position  t 
where  they  have  agreed  to  go  as  far  as  that  in  meeting  the  Government  position,  I i 
would  think  1 was  doing  a very  improper  thing  to  attempt  to  convict  the  individuals  ; 
in  a criminal  court,  and  I would  be  moved  to  that  consideration  a good  deal  by  the 
practical  difficulties  in  the  way  of  getting  convictions. 

What  were  those  practical  difficulties  ? I do  not  need  to  answer 
it,  because  we  all  know  that  gentlemen  of  splendid  wealth,  the  packers,  j 
know  how  to  postpone  action.  And  the  best  proof  of  the  necessity  ( 
for  this  legislation  is  in  the  fact  that  we  have  had  not  only  legislation  j 
to  a certain  extent  in  the  different  States,  but  we  have  had  the  decree  } 
of  the  Supreme  Court  which  has  been  violated  year  in  and  year  out  | 
by  the  packers  since  1905. 

Mr.  AswEll.  If  that  is  true,  and  I have  no  right  to  question  it, 
what  is  the  use  of  passing  any  more  legislation?  They  will  violate  ■ 
that,  too. 

Mr.  Marsh.  May  I use  an  illustration  ? It  is  not  a story.  There 
was  a very  eminent  clergyman  in  New  York,  Dr.  Parkhurst,  who 
said,  “The  wicked  flee  when  no  man  pursueth,”  but  he  added,  “they 
go  a great  deal  faster  when  the  righteous  are  after  them.”  The 
packers  will  be  much  more  apt  when  they  know  that  their  course  of 
conduct  is  under  a competent  regulating  agency  which  will  not  only 
make  them  step  rightly  but  lively,  with  penalties  that  can  be  applied 
later;  I say  they  will  be  much  more  apt  to  do  the  right  thing. 

I am  inclined  to  think  that  ultimate  revocation  of  the  license,  when 
their  case  is  proved  before  a court,  would  be  effective.  But  we  are 
not  urging  that  now.  What  we  want  now  is  absolute  publicity  in 
the  matter  of  this  business,  one  of  the  greatest  aggregations  of  capital 
in  the  country. 

There  is  another  point  I want  to  take  up,  and  I want  to  read  this 
statement  of  the  Federal  Trade  Commission  before  I speak  of  stock- 


MEAT  PACKER.  93 

yards  and  transportation  facilities.  The  Federal  Trade  Commission 
in  its  summary  says: 

If  these  five  great  concerns  owned  no  packing  plants  and  killed  no  cattle  and  still 
retained  control  of  the  instruments  of  transportation,  of  marketing,  and  of  storage, 
their  position  would  not  be  less  strong  than  it  is. 

The  producer  of  live  stock  is  at  the  mercy  of  these  five  companies,  because  they 
control  the  market  and  the  marketing  facilities  and,  to  some  extent,  the  rolling  stock 
which  transports  the  products  to  the  markets. 

The  competitors  of  these  five  concerns  are  at  their  mercy  because  of  the  control 
of  the  market  places,  storage  facilities,  and  the  refrigertor  cars  for  distribution. 

The  consumer  of  meat  products  is  at  the  mercy  of  these  five  because  both  producer 
and  competitor  are  helpless  to  bring  relief. 

Now,  Mr.  Chairman,  we  urge  that  packer-control  legislation  shall 
go  further  in  view  of  these  statements  of  the  Federal  Trade  Commis- 
sion, which  are  supported  by  adequate  evidence;  shall  go  further  and 
specifically  require  the  railroads,  within  a given  stated  time,  to 
acquire  all  the  principal  and  necessary  stockyards,  about  as  out- 
lined in  the  pending  legislation,  and  shall  provide  refrigerator  and 
specially  equipped  cars. 

Mr.  Aswell.  How  will  they  finance  that  matter  ? 

Mr.  Marsh.  I will  be  glad  to  answer  that.  We  made  a suggestion 
along  this  line  to  the  President  the  other  day,  and  we  are  to  see  the 
President  to-morrow  afternoon  about  it.  The  railway  brotherhoods 
have  shown  that  close  to  a billion  and  a quarter  of  dollars  have  been 
wasted  by  the  railroads  since  the  Cummins-Esch  law  was  enacted 
by  the  Congress  of  the  United  States. 

Mr.  Aswell.  Where  has  that  been  shown  ? Is  that  Lauck’s 
testimony  ? 

Mr.  Marsh.  A part  of  it  is  that. 

Mr.  Aswell.  I do  not  think  that  can  be  adduced  as  proof.  That 
is  a statement  of  opinion,  and  not  proof. 

Mr.  Marsh.  Well,  they  have  presented  figures,  which  have  been 
damned  but  not  disproved.  I am  waiting  for  disproof  to  be  produced 
by  the  railway  people.  And  I am  going  to  tell  you  this,  that  the 
stockholders  themselves  have  been  making  an  independent  inves- 
tigation of  the  situation,  and  I think  they  are  pretty  much  perturbed, 
from  the  statements  they  have  issued.  We  have  suggested  to  the 
President  that  this  matter  be  turned  over  to  the  Attorney  General 
for  investigation  as  to  what  can  be  recovered. 

Of  course  the  Cummins-Esch  law  did  require  the  railroads  to 
furnish  special  equipment,  including  refrigerator  cars.  I wrote  to  the 
chairman  of  the  Interstate  Commerce  Commission  asking  how  many 
refrigerator  cars  the  railroads  had  furnished  up  to  date.  He  was 
unable  to  give  me  the  exact  information.  But  I can  summarize  it, 
and  I call  to  your  attention  that  the  packers  owned,  when  the  rail- 
roads were  returned  to  their  owners,  93  per  cent  of  the  total  of  all 
kinds  of  cars  owned  by  interstate  slaughterers,  including  refrigerator 
cars,  open-top  cars,  etc.;  and  91  per  cent  of  all  refrigerator  cars 
properly  equipped  for  the  transportation  of  fresh  meats. 

Now,  these  ra'lroads  that  have  squandered  a b l ion  and  a quarler 
of  dofia-s — I do  no  say  it  has  been  absolutely  proved,  but  that  seems 
to  be  the  situakon — how  many  refrigerator  cars  do  you  suppose  they 
have  provided  up  to  the  first  of  this  year  ? Four  thousand  seven  hun- 
dred, according  to  these  figures,  while  the  Pacific  Freight  Express  Co. 
has  provided  4,000. 


94 


MEAT  PACKER, 


Mr.  Clarke.  They  are  approximate  ? 

Mr.  Marsh.  Yes.  This  list  was  partially  taken  from  the  Railway 
Age  of  January  7 and  is  substantially  correct.  The  Atchison,  Topeka 
& Santa  Fe  Railway  provided  2,500  refrigerator  cars. 

Mr.  Aswell.  What  is  the  total  number  of  refrigerator  cars  in  use  ? 

Mr.  Marsh.  I do  not  know  how  many  thousands  there  are.  I 
have  seen  the  figures,  but  I do  not  remember. 

Mr.  Aswell.  What  percentage  is  that  of  the  total  ? 

Mr.  Marsh.  I will  get  the  figures  and  let  you  know,  but  it  is  cer- 
tainly only  a small  percentage. 

M . Ten  Eyck.  Who  was  it  that  ordered  them  to  get  these  cars  ? 

Mr.  Marsh.  It  was  under  the  Cummins-Esch  law.  It  said  special 
equipment  cars.  It  did  not  say  specifically  refrigerator  cars,  but  I 
talked  to  Mr.  Esch  regarding  the  matter  and  he  said  they  were 
included. 

Mr.  Ten  Eyck.  What  recommendation  would  you  make  as  regards 
the  railroads  financing  the  matter  of  getting  these  cars  ? 

Mr.  Marsh.  What  was  that  question  ? 

Mr.  Ten  Eyck.  What  arrangement  was  made  to  finance  the  rail- 
roads in  order  for  them  to  purchase  these  cars  ? 

Mr.  Marsh.  They  were  given  a big  revolving  fund.  They  were 
given  what  was  tantamount  to  a guarantee  of  a return  of  5^  to  6 per 
cent;  and  they  have  been  advanced,  if  my  memory  serves  me  rignt, 
$1,205,000,000  since  the  railroads  were  returned  under  the  Esch- 
Cummins  law. 

Mr.  Ten  Eyck.  I understand  as  to  the  revolving  fund.  What  was 
given  specifically  for  refrigerator  cars  ? 

Mr.  Marsh.  I do  not  think  there  was  any  specific  allotment  as  to 
refrigerator  cars.  But  when  you  open  the  Treasury  doors  of  the 
United  States  to  the  railroads  you  would  think  you  would  do  some- 
thing for  the  farmers  in  the  matter  of  refrigerator  cars. 

Mr.  Aswell.  According  to  your  statement  under  the  Cummins-  j 
Esch  law  they  were  directed  to  get  refrigerator  cars  and  provided  \ 
with  money  with  which  to  do  it.  Now,  what  legislation  do  you  want  ? j 

Mr.  Marsh.  I am  glad  you  raised  that  point,  because  it  is  another 
that  I wanted  to  mention.  I think  the  Congress,  and  this  committee, 
ought  to  get  right  after  the  Interstate  Commerce  Commission. 

Mr.  Aswell.  I agree  with  you. 

Mr.  Marsh.  And  see  to  it  that  these  refrigerator  cars  are  provided. 

Mr.  Ten  Eyck.  That  is  what  I was  trying  to  bring  out.  Isn’t  there 
a commission  to  handle  this  very  thing — transportation;  so  the  ques- 
tion is,  whether  we  should  legislate  on  that  particular  subject  at  this 
time. 

The  Chairman.  In  the  Cummins-Esch  law  it  was  left  to  the  dis- 
cretion of  the  Interstate  Commerce  Commission  as  to  requiring  the 
furnishing  of  cars. 

Mr.  Marsh.  Yes;  and  I want  to  go  further  on  that.  There  is  a 
very  vital  distinction  between  the  Cummins-Esch  law  and  our 
recommendation.  The  Cummins-Esch  law  does  not  require  the 
railroads  to  acquire  all  the  refrigerator  cars  and  special-equipment 
cars.  We  wish  legislation  which  would  make  it  mandatory  upon  the 
railroads  to  acquire  all  the  refrigerator  cars  and  special-equipment 
cars  because  the  investigation  and  findings  of  the  Federal  Trade 


MEAT  PACKER. 


95 


Commission  show,  in  the  matter  of  these  peddler  cars,  the  private 
pwnership  of  these  cars  by  the  five  big  packers  gives  them  a great 
power  over  the  independents. 

The  Chairman.  Why  should  the  railroads  acquire  all  the  refriger- 
ator cars  ? 

Mr.  Aswell.  Answer  this  in  addition  to  that:  Wouldn’t  that 
make  it  impossible  for  the  packers  at  times  to  be  able  to  get  cars 
n an  emergency,  say,  to  ship  out  meats  on  time  ? 

Mr.  Marsh.  My  reason  for  suggesting  that  is  that  the  small 
independent  has  not  much  capital.  These  cars  do  not  cost  so  much 
for  the  big  man,  but  it  is  uneconomical  to  require  the  investment  of, 
bay,  $25,000  or  $50,000,  on  the  part  of  a small  plant  that  has  not 
big  capital  and  when  it  is  not  using  them  continuously.  Further- 
more, it  is  foolish  to  run  a particular  refrigerator  car  from  one  part 
bf  the  country  to  another  simply  because  that  car  belongs  to  a 
barticular  company. 

And  that  brings  me  to  say  that  Government  operation  of  railroads 
tvas  the  most  economical  we  have  ever  had,  according  to  the  facts, 
but  not  according  to  the  propaganda,  because  you  unified  all  the 
equipment . You  will  recall  that  section  15  of  the  Cummins-Esch 
aw  specifically  provides  when  the  Interstate  Commerce  Commission 
thinks  an  emergency  exists  or  is  threatened  it  may  order  a pooling 
Df  all  equipment  of  railroads,  and  joint  or  common  use  of  terminals. 
That  provision  which  the  Congress  wrote  into  the  Cummins-Esch 
aw  of  1920  illustrates  one  of  the  reasons  why  the  railroads  should 
be  required  to  own  all  the  refrigerator  cars— that  they  may  be  shipped 
n a hurry  to  the  points  most  needed,  and  save  an  enormous  amount 
if  idle  haulage,  which  of  course  is  a great  expense. 

I am  not  a practical  stock  man,  but  Mr.  Laseter,  a very  practical 
stock  man,  has  shown  to  you  that  the  shrinkage  on  a long  haul  on  a 
lead  of  cattle  means  from  5 to  8 or  9 per  cent,  in  order  to  get  same  to 
! he  place  where  it  may  be  slaughtered.  That  is  entirely  waste, 
[t  does  not  mean  something  in  the  pocket  of  the  packer,  but  it  is  an 
ibsolute  waste,  and  is  one  thing  that  has  hit  agriculture  very  hard. 

That  is  one  answer  to  your  question  as  to  acquisition  of  refrigerator 
iars,  Mr.  Ten  Eyck. 

Now,  Mr.  Aswell,  have  I answered  your  question? 

Mr.  Aswell.  No;  I do  not  think  you  have. 

Mr.  Marsh.  Well,  will  you  repeat  it? 

Mr.  Aswell.  My  question  was  if  the  railroads  owned  all  the 
•efrigerator  cars  and  the  packers  owned  none,  wouldn’t  there  come 
imes  of  emergency  when  the  packers  might  not  be  able  to  get  cars, 
is  happens  in  almost  every  other  line  of  business  ? 

Mr.  Marsh.  I doubt  it.  I doubt  whether  there  would  be  any 
greater  emergency  on  the  part  of  the  big  packers,  though  it  is  a 
>ossibility  I concede.  But  we  know  that  91  per  cent  of  the 
efrigerator  cars  being  owned  to-day  by  the  big  packers  has  been  a 
ieterrent  to  the  independent  packing  plant. 

Mr.  Jones.  Do  any  of  the  independent  packing  plants  own  private 
efrigerator  cars  ? 

Mr.  Marsh.  A few  of  them  have  a few.  I do  not  remember  the 
ligures. 

Mr.  Jones.  Your  suggestion  is  that  they  should  be  all  made  com- 
non  carriers  and  for  common  use  ? 


96 


MEAT  PACKER. 


Mr.  Marsh.  Yes.  It  has  not  been  stressed  in  the  newspapers, 
because  the  packers  are  not  the  only  ones  who  know  about  the  effec-  1 
tiveness  of  propaganda.  One  of  the  troubles  has  been,  since  the  rail- 
roads went  back  to  their  owners,  that  it  has  been  impossible  for  some 
people  at  some  times  to  get  cars  when  needed,  and  this  has  occurred 
more  and  more.  The  Farmers’  National  Council  has  asked  the 
Interstate  Commerce  Commission  to  thoroughly  investigate  the  mat- '! 
ter  of  discrimination  in  service,  and  rebates  granted,  under  private 
ownership  of  railroads.  And  I will  say  this  very  frankly,  Mr.  Chair- 
man and  gentlemen  of  the  committee,  that  none  of  the  progressive 
farmers  in  America,  so  far  as  I know,  think  there  is  going  to  be  any 
permanent  solution  of  the  present  disaster  until  the  railroads  are 
returned  to  Government  control  and  Wall  Street  is  thrown  out  of 
control.  Of  course  that  meets  the  situation  which  you  have  raised  as 
to  acquisition  of  stockyards  and  refrigerator  cars  and  other  special 
equipment  cars  for  the  railroads.  But  we  do  not  need  to  wait  six 
months  or  a year  until  the  railroads  go  back  to  Government  control 
or  ownership. 

Mr.  Williams.  Would  that  be  a solution  of  the  meat  packing 
industry  trouble  ? 

Mr.  Marsh.  Would  what? 

Mr.  Williams.  Government  ownership  or  operation. 

Mr.  Marsh.  No;  there  is  a clear  line  of  distinction  which  I will  be  • 
glad  to  make  between  the  two.  Any  enterprise  which  in  order  to  be 
efficiently  and  economically  and  honestly  administered  must  be  a 
monopoly,  like  transportation,  should  be  owned  and  operated  by  the 
Government.  On  the  other  hand,  the  Government  should  not  break 
into  private  industry  where  competition  is  essential,  in  our  judgment.  ; 
I am  speaking  now  of  the  Federal  Government  and  not  of  State, 
governments. 

Mr.  Williams.  Do  not  the  railroads  do  a competitive  business? 

Mr.  Marsh.  They  compete  in  looting  the  Treasury;  that  is  about) 
the  only  competition  in  which  they  are  engaged  under  the  Cummins- I 
Esch  law. 

Mr.  Jones.  Don’t  you  think  we  had  better  service  prior  to  either! 
Government  operation  or  since  the  Cummin s-Esch  law? 

Mr.  Marsh.  I will  tell  you  frankly  that  I think  the  figures  show 
absolutely  that  under  Federal  control  the  situation  was  bettei. 

Mr.  Aswell.  You  made  the  statement  that  that  was  the  period 
of  most  economical  handling  that  has  ever  occurred  in  our  history. 
If  that  be  true  how  did  it  happen  that  the  Government  had  to  pay 
such  a large  bonus,  and  why  did  freight  and  passenger  rates  increase 
so  greatly,  if  there  was  so  much  economy  in  management? 

Mr.  Marsh.  During  the  war  ? 

Mr.  Aswell.  Yes.  Why  did  the  Government  have  to  pay  out 
so  much  money  to  keep  the  railroads  on  their  feet  instead  of  increas- 
ing freight  and  passenger  rates  ? 

Mr.  Marsh.  In  the  first  place,  the  Government  did  not  have  to 
pay  out  so  much  money. 

Mr.  Aswell.  Well,  that  is  a question  of  opinion  about  which  men 
differ. 

Mr.  Marsh.  Well,  it  is  a fact  that  rates  did  not  increase  very  much  j 
during  the  war. 


MEAT  PACKER. 


97 


Mr.  Aswell.  Oh,  a great  deal. 

Mr.  Marsh.  Nothing  like  they  have  increased  since. 

Mr.  Clague.  They  were  a great  deal  higher  than  they  were  before, 
and  we  had  about  one-half  as  good  service  as  we  had  before. 

Mr.  Marsh.  I can  give  you  a number  of  figures  on  that  subject, 
but  it  would  take  15  minutes,  if  you  want  me  to  do  so. 

Mr.  Aswell.  You  raised  an  interesting  question.  Let  us  have  an 
answer. 

The  Chairman.  The  rates  were  materially  increased  and  the  de- 
ficit was  paid  out  of  the  Federal  Treasury. 

Mr.  Marsh.  Mr.  Chairman,  will  you  tell  me  of  a single  industry  of 
any  size  in  America  which  did  not  increase  its  prices  from  two  to 
five  times  as  much  as  the  freight  rates  were  increased  under  Govern- 
ment operation  of  railroads?  I do  not  know  of  one  that  did  not 
increase  from  one  to  six  times.  When  I said  they  were  not  increased 
very  much  I meant  that  they  were  not  increased  relatively  to  the 
increase  in  other  lines.  Mind  you,  when  the  farmer’s  prices  went 
down  50  per  cent  the  freight  rates  went  up  33 J per  cent. 

Mr.  Aswell.  If  you  take  into  consideration  the  increase  in  freight 
rates  during  the  war,  and  add  to  that  amount  what  the  Government 
did  pay  to  the  railroads  in  addition  to  those  increases,  your  statement 
falls. 

Mr.  Marsh.  Well,  I would  be  very  glad  to  answer  that  in  detail.  I 
will  simply  say,  however,  at  the  present  time  that  I think  you  are 
mistaken. 

The  Chairman.  Do  you  want  your  question  answered,  Mr.  Aswell  ? 

Mr.  Aswell.  Never  mind  if  he  does  not  care  to. 

Mr.  Marsh.  All  right. 

The  Chairman.  There  were  increases  all  along  the  line.  There 
were  increases  in  railroad  rates,  and  the  deficit  was  met  out  of  the 
Treasury,  and  we  had  the  poorest  and  worst  service  we  ever  had. 

Mr.  Clague.  Yes;  that  was  true  of  our  country. 

Mr.  Clarke.  And  there  was  deterioration  in  rolling  stock  and 
deterioration  in  roadbed  and  deterioration  in  morale,  and  the  whole 
business  was  bad. 

The  Chairman.  While  that  may  not  have  been  entirely  due  to 
Government  control,  yet  that  was  the  fact. 

Mr.  Marsh.  It  was  due  to  the  fact  that  the  Wall  Street  crowd  was 
in  control  and  doing  its  best  to  make  Government  operation  a failure, 
so  as  to  defeat  Government  ownership  of  railroads. 

Mr.  Williams.  The  railroads  in  Russia  to-day  are  being  operated 
by  the  government,  aren’t  they,  and  how  are  they  getting  along? 

Mr.  Marsh.  They  are  probably  getting  along  without  as  much 
graft  as  is  the  case  in  this  country,  probably  not  1 per  cent  of  it. 

Mr.  McLaughlin  of  Nebraska.  Let  us  get  back  to  the  packing 
business.  We  are  here  holding  a hearing  in  reference  to  these  packer 
bills,  and  I think  we  are  getting  a long  ways  off  from  the  subject. 

The  Chairman.  Yes;  let  us  get  on  with  this. 

Mr.  Marsh.  I want  this  to  go  into  the  record.  The  deficit  under 
Federal  control  was  less  than  $40,000,000  a month,  if  my  memory  is 
correct,  about  $40,000,000  a month,  and  has  been  about  $102,000,000 
or  $103,000,000  a month  under  the  Cummins-Esch  law.  We  are 
raising  the  question  as  to  what  the  relative  deficit  was.  But  my 
46985—21 7 


98 


MEAT  PACKER. 


point  is  this,  further,  which  is  of  great  importance,  not  only  aro 
freight  rates  of  importance  to  the  independent  packer,  and  to  the 
farmer,  and  everybody  else,  but  equality  of  service  is  of  equal  im- 
portance. You  will  agree  to  that,  won’t  you,  Mr.  Chairman? 

The  Chairman.  But,  Mr.  Marsh,  if  this  bill  is  to  be  of  any  value 
at  all  it  is  simply  to  encourage  the  independent  packer,  and  it  is  to- 
do  away  with  the  waste  you  refer  to  of  5 per  cent  to  10  per  cent  in 
shrinkage. 

Mr.  Marsh.  Yes;  in  the  long  hauls. 

The  Chairman.  The  question  is,  What  do  the  independent  packers 
want?  I have  conferred  with  a number  of  independent  packers. 
There  are  two  of  them  within  30  miles  of  my  home.  They  say  they 
are  not  interested  in  these  privately  owned  cars,  that  they  do  not 
concern  them.  Mr.  Hormel  is  here.  His  plant  is  within  30  miles 
of  my  home.  I take  it  he  will  handle  that  proposition  when  he  appears 
before  the  committee. 

Mr.  Marsh.  There  may  be  a difference  of  opinion. 

The  Chairman.  I want  to  get  at  just  why  the  railroads  should 
acquire  all  the  refrigerator  cars.  You  have  gone  into  that.  Let  us 
proceed  with  the  hearing. 

Mr.  Marsh.  Those  are  our  chief  suggestions,  plus  this  one,  and 
then  I want  to  conclude.  I want  to  present  a brief  statement  as  ■ 
to  this  principle  which  we  think  ought  to  be  taken  into  consideration  j 
in  connection  with  this  great  food  industry.  There  ought  not  to 
be  a subsidy  or  any  subvention  out  of  the  Public  Treasury,  but  this  \ 
legislation  should  provide  that  whoever  is  in  charge  of  the  super- 
vision of  the  meat-packing  industry  should— 

(1)  Furnish  to  registrants  reports  embodying  existing  knowledge 
concerning  satisfactory  and  economical  appliances  and  methods  of  . 
food  preservation  by  cold  storage,  freezing,  cooking,  dehydration,  ; 
or  otherwise,  and  of  all  improvements  in  the  art,  and  to  detail  persons  , 
experienced  in  such  art  to  consult  and  advise  with  registrants. 

(2)  Cooperate  with  registrants  in  procuring  for  them  adequate  < 
services  by  common  carriers,  by  rail  or  otherwise,  including  provi-  i 
sion  for  special  cars  needed  in  the  proper  transportation  of  live  ] 
stock,  live-stock  products,  or  perishable  foodstuffs. 

(3)  Furnish  to  registrants  all  available  information  as  to  supplies  ) 
of  foodstuffs  handled  by  such  registrants  and  the  location  and  move-  . 
ment  and  transportation  costs  of  such  foodstuffs. 

(4)  As  far  as  practicable,  when  requested  by  any  such  registrant,. 
provide  for  the  inspection  by  agents  of  the  commission  of  the  live  < 
stock,  live-stock  products,  or  perishable  foodstuffs  received  or  dis-  !. 
tributed  by  such  registrant,  to  determine  the  quality,  quantity,  or 
condition  thereof,  and  for  the  issuance  by  such  agents  of  certificates 
showing  the  result  of  such  inspection;  and  in  the  conduct  of  such 
inspections  to  cooperate  with  duly  authorized  local  authorities.  ; 
Such  certificates  shall  be  accepted  in  the  courts  of  the  United  States 
and  of  the  States  as  prima  facie  evidence  of  the  quality,  quantity, 
or  condition  at  the  time  and  place  of  inspection  of  the  live  stock, 
live-stock  products,  or  perishable  foodstuffs  covered  thereby. 

A question  was  raised  this  morning  by  Congressman  Ten  Eyck, 
and  I believe  he  is  not  here,  as  to  the  marketing  end  of  this  matter.  ; 
We  think  that  this  foodstuff  or  live  stock  commission  should 


MEAT  PACKER. 


99 


concern  itself  in  trying  to  encourage  cooperative  marketing,  inde- 
pendent slaughterhouses — municipal,  cooperative,  or  other  gov- 
ernmental agencies.  And  they  have  got  to  have  help,  because  the 
big  packers,  despite  their  assertions  to  the  contrary,  and  some  of  you 
gentlemen  who  were  here  last  year  will  remember,  I think,  quite  a 
discussion  over  that  subject;  I say  they  naturally  do  not  encourage 
independent  slaughterhouses  and  packing  plants  because  it  is  not 
good  business  to  do  so.  We  believe  the  Government  should  assist 
them. 

These  are  our  chief  recommendations.  I will  conclude  unless 
there  are  some  questions  that  you  wish  to  ask.  And  I am  going  to 
ask  that  the  representatives  of  the  four  railroad  brotherhoods  may 
! be  allowed  to  appear  and  make  a brief  statement  in  behalf  of  this 
legislation.  I would  like  to  have  Mr.  W.  M.  Clark,  vice  president  of 
[the  Order  of  Railroad  Conductors,  make  a statement. 

The  Chairman.  The  committee  will  be  glad  to  hear  Mr.  Clark. 

STATEMENT  OF  MR.  WILLIAM  M.  CLARK,  VICE  PRESIDENT 

AND  NATIONAL  LEGISLATIVE  REPRESENTATIVE  ORDER 

OF  RAILROAD  CONDUCTORS,  WASHINGTON,  D.  C. 

Mr.  Clark.  Mr.  Chairman  and  gentlemen  of  the  committee,  in 

I appearing  before  you  to-day  I do  so  in  behalf  of  the  men  in  engine* 
train,  and  yard  service  represented  by  the  Brotherhood  of  Locomotive 
Engineers,  Brotherhood  of  Locomotive  Firemen  and  Enginemen, 

I Order  of  Railway  Conductors,  and  Brotherhood  of  Railroad  Train- 
men, comprising  approximately  600,000  men.  The  railroad  em- 
ployees are  materially  and  vitally  interested  in  a proper  solution  of 
the  question  of  control  or  supervision  of  the  packing  industry  of  the 
country  in  order  that  we,  the  consumers,  may  have  meat  products 
at  the  lowest  possible  reasonable  cost,  and  at  the  same  time  we  are 
interested  in  seeing  that  the  producers,  who  are  the  farmers,  are 
treated  fairly  and  receive  reasonable  prices  for  their  commodities  and 
for  the  labor  in  producing  such  commodities.  We  realize — as  do  all 
who  are  trying  to  contribute  our  part  to  the  solution  of  the  present 
problems — the  dangers  of  combinations  which  may  eventually  con- 
trol and  manipulate  the  necessities  of  life  to  the  detriment  of  the 
[producers  and  consumers  of  our  country,  and  we  believe  that  there 
is  a possibility  that  unrestrained  and  unrestricted  manipulation  on 
the  part  of  a few  men  may  result  in  great  injury  to  the  American 
public.  There,  at  least,  may  be  an  opportunity,  by  and  through  the 
means  of  consolidated  interests,  afforded  for  unrestricted  control  of 
the  meat-packing  industry  of  this  country  to  such  an  extent  that  it 
would  work  an  injustice  and  hardship  to  the  people. 

After  sober  and  thoughtful  consideration  of  this  vital  question, 
these  four  organizations  have  decided  to  favor  proper  and  reasonable 
control  or  regulation  of  the  packing  industry;  but  being  unfamiliar 
with  many  of  the  details  incident  to  the  shaping  of  proper  legislation, 
we  have  decided  to  cooperate  with  the  progressive  farmers,  who  are 
thoroughly  familiar  with  this  question,  and  to  render  such  assistance 
to  them  as  is  possible  in  their  efforts  toward  control  or  regulation  of 
the  packing  industry.  We  accordingly  desire  to  place  the  organiza- 
tions on  record  as  favoring  reasonable  packer  control  or  regulation, 


100 


MEAT  PACKER. 


and  to  indorse  the  position  taken  by  the  progressive  farmer  organiza- 
tions in  this  connection,  leaving  the  details  to  be  worked  out  by  the 
members  of  this  committee  and  the  gentlemen  representing  the 
farmers’  organizations. 

This  statement  is  concurred  in  by  Mr.  H.  E.  Wills,  assistant  grand 
chief  engineer  and  national  legislative  representative  of  the  Brother- 
hood of  Locomotive  Engineers;  Mr.  P.  J.  McNamara,  vice  president 
and  national  legislative  representative  of  the  Brotherhood  of  Loco- 
motive Firemen  and  Enginemen;  and  Mr.  W.  N.  Doak,  vice  president 
and  national  legislative  representative  of  the  Brotherhood  of  Railroad 
Trainmen. 

Mr.  Chairman  and  gentlemen  of  the  committee,  I thank  you  for 
this  opportunity  to  give  expression  to  our  views  on  the  subject. 

The  Chairman.  The  committee  is  very  glad  to  have  heard  you. 
If  there  are  no  questions  the  committee  will  now  hear  Mr.  Campbell. 

STATEMENT  OF  MR.  VERNON  CAMPBELL,  OF  SAN  JOSE, 

CALIF. 

Mr.  Campbell.  Mr.  Chairman  and  gentlemen  of  the  committee,  I 
represent  a group  of  farmers  in  California  owning  their  own  canneries,  ] 
an  organization  known  as  the  California  Cooperative  Canners. 

We  are  interested  in  this  bill,  of  course,  not  from  the  standpoint  of 
stock  growers,  but  from  the  fact  that  we  have  been  selling  quite  a 
considerable  portion  of  our  pack  of  all  kinds  of  fruit  grown  in  Cali- 
fornia through  the  packers. 

Mr.  Clarke.  Did  you  say  “to”  the  packers  or  “through”  the 
packers  ? 

Mr.  Campbell.  Through  the  packers.  We  are  interested  particu-  s 
larly  in  the  Haugen  bill,  which  I take  it  interests  this  committee  more  j 
than  the  other  bills.  As  far  as  the  other  bills  are  concerned  I do  not  ( 
know  about  that.  We  are  not  partiuclarly  interested  in  the  stock  | 
growing  business,  as  I have  said,  and  I will  not  attempt  to  discuss? 5 
that  matter.  But  I would  say  if  I were  allowed  to  settle  the  meat  ’ 
growing  business  I think  I could  settle  it  for  all  time  to  come  by  my  j 
conduct  at  home.  Neither  myself  nor  any  member  of  my  family 
eats  any  meat,  and  if  others  followed  our  example  there  would  be  no 
packer  problem  at  all  before  you. 

Mr.  Aswell.  You  seem  to  be  quite  a healthy  specimen,  too  ? 

Mr.  Campbell.  We  have  had  about  as  healthy  a family  as  you  ever 
saw,  and  they  have  never  eaten  any  meat  and  I have  not  done  so  in  30  i 
years. 

Mr.  Gernerd.  Are  you  a disciple  of  Dr.  Kellogg  ? 

Mr.  Campbell.  No,  sir.  I was  born  in  Iowa. 

Mr.  Tincher.  The  chairman  eats  meat. 

Mr.  Campbell.  Well,  he  does  not  look  at  all  fierce. 

The  Chairman.  You  may  proceed  with  your  statement. 

Mr.  Campbell.  Section  403  of  the  Haugen  bill  begins : 

Nothing  contained  in  this  act,  except  as  otherwise  provided  herein,  shall  be  con- 
strued * * *. 

And  then  if  you  will  turn  to  subdivision  (b) , it  states : 

(6)  To  alter,  modify,  or  repeal  such  acts  or  any  part  or  parts  thereof,  or 

(c)  To  prevent  or  interfere  with  any  investigation,  proceeding,  or  prosecution  begun  j 
&nd  pending  at  the  time  this  act  becomes  effective,  or 


MEAT  PACKER. 


101 


( d ) To  relieve  any  person  from  obedience  to  any  consent  or  other  decree  heretofore 
| entered  against  him  by  a court  of  competent  jurisdiction. 

Now,  gentlemen  of  the  committee,  as  fruit  farmers  in  California  we 
object, 'as  we  think  you  will  when  you  consider  the  merits  of  that 
| section,  to  allowing  that  to  remain  and  go  before  the  Congress  in  that 
way.  The  consent  decree  in  our  opinion  is  one  of  the  most  vicious 
! things  that  ever  came  up  before  the  American  people.  We  object  to 
legislation  by  decree.  We  believe  that  the  Congress  should  legislate 
in  all  these  matters. 

To  show  you  how  evil  a thing  like  that  can  be,  I want  to  refer  you  to 
I the  packer’s  decree,  fourth  section,  which  reads  as  follows: 

That  the  corporation  defendants  and  each  of  them  be,  and  they  are  hereby,  per- 
j petually  enjoined  and  restrained  from,  in  the  United  States,  either  directly  or 
indirectly,  by  themselves  or  through  their  officers,  directors,  agents,  or  servants, 
engaging  in  or  carrying  on,  either  by  concert  of  action  or  otherwise,  either  for  domestic 
| trade  or  for  export  trade,  the  manufacturing,  jobbing,  selling,  transporting  (except 
as  common  carriers),  distributing  or  otherwise  dealing  in  any  of  the  following  products 
or  commodities. 

These  commodities  are  what  have  been  spoken  of  as  unrelated 
lines.  We  have  been  packing  unrelated  lines.  We  are  fruit  growers 
packing  our  goods  in  cans.  We  found  the  meat  packers  were  the 
only  concerns  in  the  United  States  who  had  export  facilities  powerful 
and  far-reaching  enough  to  export  our  goods  to  many  countries. 
If  you  had  gone  into  our  warehouses  when  we  were  selling  our  goods 
for  export  you  would  have  found  boxes  and  cases  marked  to  all  points 
of  the  world.  To-day  these  facilities  are  destroyed,  for  what  reason 
I do  not  know. 

I can  not  conceive  why  any  such  decree  should  have  ever  been 
entered  into.  Our  people  in  California  can  see  no  reason  why  there 
should  be  destroyed  any  of  the  facilities  built  up  in  this  country  for 
the  distribution  of  food  products.  We  think  this  committee  should 
go  on  record  as  being  opposed  to  any  such  decree. 

Mr.  Clarke.  That  means  that  now  your  foreign  market  is  de- 
stroyed? 

Mr.  Campbell.  So  far  as  the  packers  are  concerned,  yes,  and  they 
were  the  only  concerns  in  this  country  big  enough  to  do  any  con- 
siderable foreign  business  in  the  export  of  our  goods. 

Mr.  Aswell.  Who  is  responsible  for  that  decree  ? 

Mr.  Campbell.  I do  not  know  a thing  about  it. 

The  Chairman.  You  are  asking  why  it  was  entered.  I think  it 
was  entered  into  to  settle  a fight  between  the  wholesale  grocers,  or 
i the  brokers,  and  the  packers.  The  charge  was  made  that  the  packers 
were  putting  the  jobbers  or  wholesale  grocers  out  of  business.  That 
is  Mr.  Palmer’s  proposition,  and  we  are  not  dealing  with  it  in  any 
way  whatever.  You  would  not  ask  the  Congress  to  set  it  aside, 
would  you  ? 

Mr.  Campbell.  Yes,  sir;  I would.  I think  t should  be  attended 
to  by  the  Congress  instead  of  by  an  administrative  department  of 
the  Government. 

Mr.  Aswell  Do  you  know  how  the  packers  stand  on  that  proposi- 
tion? 

Mr.  Jones.  Why,  they  agreed  to  it. 

Mr.  Aswell.  Probably  under  certain  conditions.  Do  they  now 
want  it  to  continue  ? 


102 


MEAT  PACKER. 


Mr.  Campbell.  I do  not  know. 

Mr.  Voigt.  They  went  nto  court  and  consented  to  the  entry  of 
that  decree. 

Mr.  Aswell.  But  they  were  forced  to  do  that,  were  they  not? 

Mr.  Voigt.  I do  not  think  so.  I think  the  packers  went  to  the 
Attorney  General. 

Mr.  Veeder.  If  you  will  turn  to  Attorney  General  Palmer’s  state- 
ment before  the  Senate  committee,  and  also  before  this  committee, 
you  will  see  that  he  tells  you  why  the  packers  entered  into  the 
decree,  and  it  was  because  he  demanded  it  and  the  packers  met  the 
demand. 

Mr.  Voigt.  In  connection  with  that  it  should  appear  that  the 
packers  went  to  the  Attorney  General. 

Mr.  Aswell.  The  Attorney  General  specified  this  decree. 

Mr.  Voigt.  They  went  to  the  Attorney  General  for  the  purpose 
of  settling  their  trouble.  The  Attorney  General  testified  before  this 
committee  last  year  that  he  was  satisfied  the  packers  had  violated 
the  antitrust  law  and  that  they  were  subject  to  prosecution.  When 
the  Attorney  General  made  that  announcement  the  packers  went  H 
to  him  and  they  stipulated  this  decree.  It  is  my  judgment  that 
the  packers  went  to  the  Attorney  General  for  the  purpose  of  head- ; 
ing  off  any  prosecution  under  the  antitrust  law,  and  this  is  what, 
they  got. 

Mr.  Veeder.  May  I say  one  word  more  ? 

The  Chairman.  Yes. 

Mr.  Veeder.  The  Attorney  General  himself  in  the  same  state- 
ment stated  that  the  packers  came  to  him  and  asked'  for  a hearing, ! 
which  they  had  been  denied  at  other  places,  and  that  he  demanded . 
that  they  enter  this  decree,  and  they  did,  and  I wish  to  remind  you ; 
that  the  decree  contains  an  express  statement  that  it  does  not, 
adjudicate  that  the  packers  have  violated  any  law  of  the  Unitedj 
States. 

Mr.  Tincher.  Well,  at  any  rate  this  young  gentleman’s  sugges-; 
tion  to  this  committee  seems  to  me  like  it  is  apropos  at  this  time,  i 
and  that  is,  whether  we  are  going  to  live  under  laws  made  by  con-: 
certed  agreed  decrees  between  packers  and  Attorney  Generals,  or 
whether  the  legislative  bodies  of  this  Government  are  going  to 
function  and  pass  laws. 

Mr.  Campbell.  I represent  a group  of  farmers  in  California.  Mr. 
Free,  who  is  the  representative  from  my  district,  in  Congress,  will 
speak  to  you  after  I conclude  my  statement.  But  that,  gentlemen, 
is  the  way  our  people  out  in  California  feel  about  it.  They  don’t 
like  this  thing  of  living  under  decrees.  We  feel  that  we  send  our 
Congressmen  here  to  express  our  desires  and  our  will,  and  when 
this  decree  was  promulgated — I will  say  this,  that  I don’t  know  who 
who  it  helped;  it  certainly  didn’t  help  our  group  of  farmers  in 
California,  because  the  packers  were  in  a position  to  compete  and 
get  our  stuff  to  the  consumer  at  a less  price.  They  were  in  a position  : 
to  compete  with  the  6,000  jobbers  who,  in  many  cases,  were  repre- 
senting us  in  this  country.  As  I say,  they  were  in  a position  to 
compete  and  get  our  stuff  to  the  consumer  at  a less  price. 

For  instance,  52  per  cent  of  the  people  of  the  United  States  live 
in  towns  of  2,500  and  over.  Forty-eight  per  cent  of  the  inhabitants 
of  the  United  States  live  in  towns  of  less  than  2,500  and  in  rural 


MEAT  PACKEE. 


103 


communities.  We  can  not  reach  those  smaller  towns.  Now  we 
have  6,000  jobbers  located  in  a few  of  the  larger  places,  places  of 
over  200,000  inhabitants.  Now,  in  order  to  take  our  food  to  the 
people,  to  two-thirds  of  the  people  of  the  United  States,  we  have  to 
ship  to  centers  and  reship  out  again.  Our  products  coming  from 
the  far  West,  coming  from  California,  such  products  as  lemons  and 
oranges  and  lettuce  and  onions,  and  all  those  sorts  of  things,  and 
coming  from  down  in  Texas,  are  delivered  in  certain  central  points, 
and  then  they  must  be  reshipped,  and  by  the  time  they  reach  the 
consumer  they  cost  a great  deal  too  much  money.  Our  losses  are 
largely  in  distribution,  not  in  original  price,  as  we  know  as  farmers. 

Now,  the  meat  packers  have  built  up  a system  from  which  they 
reach  17,000  out  of  28,000  places  in  the  United  States,  and  no  other 
system  has  been  built  up  comparable  to  it. 

Mr.  Jones.  I have  heard  it  charged,  Mr.  Cambpell — I don’t  know 
whether  it  is  true — but  I have  heard  it  charged  that  the  use  of 
refrigerator  cars  was  made  in  order  to  ship  these  unrelated  products, 
the  refrigerator  cars  having  a sort  of  preference  shipment,  and  there- 
fore they  made  faster  delivery  of  these  products  by  shipping  them  in 
the  refrigerator  cars,  which  had  preference  given  them. 

Mr.  Campbell.  Yes. 

Mr.  Jones.  The  preference  given  them  by  shipping  them  in  refrig- 
erator cars,  it  had  been  charged,  gave  them  the  chance  to  deliver 
unrelated  products  faster. 

Mr.  Campbell.  Yes. 

Mr.  Jones.  Now,  if  the  companies  furnished  refrigerator  cars  to 
•everyone,  couldn’t  the  others  deliver  their  products  just  as  soon  as 
the  packers  ? 

Mr.  Campbell.  Yes.  I am  not  interested  in  who  delivers  them; 
I am  not  interested  in  whether  it  is  the  packers  or  somebody  else, 
but  I want  them  delivered.  I am  drawing  the  stuff  out  of  the  ground, 
and  I want  it  delivered. 

Mr.  Jones.  I understand. 

Mr.  Campbell.  Now,  this  consent  decree  absolutely  destroyed  that 
facility.  Now,  I saw  Tom  Wilson  a few  years  ago  and  talked  with 
him  about  this.  We  had  trouble  delivering  our  stuff,  and  I came  to 
‘Chicago,  and  I said,  “Mr.  Wilson,  the  packers  have  got  a distributing 
system  that  we  ought  to  use  to  get  our  stuff  to  the  consumer.” 
“What  do  you  suggest”  ? he  said.  I said,  “I  suggest  that  you  haul 
at  cost,  to  the  consumer,  and  I will  give  you  a small  bonus.”  He 
said,  “It  costs  6 per  cent.”  I said,  “6  and  2 are  8.”  He  said,  “Yes, 
we  will  undertake  it.”  Now,  it  costs  us  100  per  cent  to  deliver  to 
the  consumer,  and  if  we  can  take  those  cars  and  deliver  it  at  8 per 
cent,  let  us  do  it.  I don’t  care  about  the  jobber  or  anybody  else. 
We  have  a lot  of  stuff,  and  we  want  it  delivered. 

Mr.  Jones.  But  couldn’t  they  get  it  there  if  the  companies  fur- 
nished the  refrigerator  cars  to  the  other  distributing  systems  as 
well  ? 

Mr.  Campbell.  That  is  all  right,  but  they  are  not  distributing. 
The  packers  have  got  it.  The  canners  of  the  United  States,  the 
National  Canners’  Association,  went  on  record  for  no  legislation  for 
the  packers,  because  they  feared  this  very  thing  would  happen. 
Now  as  to  this  decree,  we  had  nothing  to  say  about  it.  Now  it  comes 
-close  to  our  hearts,  because  we  grow  something  in  California  that  you 


104 


MEAT  PACKER. 


want,  but  we  can  not  sell  it;  we  can  not  deliver  it,  and  so  we  are 
plowing  the  stuff  under;  we  are  plowing  the  things  we  raise  out  there 
into  the  fields,  and  you  are  paying  ten  prices  here  for  those  same  i 
things,  and  one  of  the  reasons  is  because  these  consent  decrees  put 
these  people  out  of  it — put  them  out  of  the  distribution. 

Mr.  Jones.  But  if  you  used  that  system,  and  had  only  limited 
ownership  of  refrigerator  cars  and  ultimately  put  the  other  system  I 
of  distribution  out  of  business,  you  would  have  to  increase  your  j 
refrigerator  cars  very  greatly  in  order  to  distribute  all  the  products  j 
that  would  like  to  go.  Of  course,  you  have  got  your  canners’  prod- 
ucts ; you  would  like  to  have  them  go  rapidly  ? 

Mr.  Campbell.  Yes. 

Mr.  Jones.  There  are  all  kinds  of  other  foods  and  eatables  that  the 
various  people  would  like  to  have  distributed,  and  you  can  not  give 
a preference  to  all  of  them,  can  you  ? 

Mr.  Campbell.  They  can  increase  the  facilities.  If  there  is  a dollar 
in  the  business  you  know  the  facilities  will  be  increased.  And  the 
packers — I don’t  know  anything  about  their  problem — but  it  seems 
to  me  that  if  we  had  double  their  distribution,  if  we  can  give  them1 
canned  goods,  if  we  can  give  them  beans  and  beets  and  flour,  etc.,  one. 
salesman  could  go  into  a store  and  sell  all  those  things  at  half  the- 
cost. 

Mr.  Jones.  Then  it  would  be  better  under  that  theory  for  one' 
concern  to  handle  everything  ? . 

Mr.  Campbell.  Yes,  sure. 

The  Chairman.  Were  the  packers  selling  for  less  than  others  ? f 

Mr.  Campbell.  Yes.  That  is  the  reason  why  the  other  fellows, 
kicked. 

The  Chairman.  I understood  it  cost  less  to  distribute  ? 

Mr.  Campbell.  Yes. 

The  Chairman.  Does  that  enable  the  retail  dealer  to  buy  at  a] 
less  price  ? 1 

Mr.  Campbell.  Yes,  sir;  surely. 

Mr.  Tinciier.  Well,  if  there  was  a tendency  toward  the  packers* 
having  a monopoly  on  these  unrelated  lines,  a decree  just  taking* 
them  clear  out  of  the  market,  instead  of  a law  affording  the  com- 
petitor cars  and  transportation  facilities,  was  rather  attacking  the 
thing  at  the  wrong  end,  wasn’t  it? 

Mr.  Campbell.  Why,  certainly;  it  showed  no  brains  at  all. 

Mr.  Tincher.  Well,  that  is  what  I told  Palmer  when  he  did  it,  but 
he  didn’t  agree. 

Mr.  Campbell.  He  was  advertising. 

Mr.  Tincher.  Doesn’t  that  decree  also  prevent  the  packer  from 
engaging  in  the  retail  business  ? I know  he  talked  about  that.  Is  j 
that  in  the  decree  ? 

Mr.  Veeder.  There  is  such  a provision  in  the  decree. 

Mr.  Tincher.  That  is  another  way  to  cheapen  the  product. 

Mr.  Jones.  Would  it  be  better  to  have  sufficient  refrigerator  cars 
and  have  them  for  common  use,  and  let  any  one  engage  in  the  business  ! 
of  distribution  that  wanted  to,  packers  or  anybody  else  ? Giving 
them  all  carte  blanche  to  compete  on  equal  terms  ? 

Mr.  Campbell.  You  made  a few  remarks  this  morning  that  made  i 
me  think  that  you  had  given  this  lots  of  attention.  I have  thought  of  j 
nothing  else  for  25  years  in  California.  If  we  had  a corporation  in  the  ' 


MEAT  PACKER. 


105 


United  States  big  enough,  owned  by  millions  of  stockholders,  con- 
sumers and  producers  alike,  that  had  thousands  of  refrigerator  cars, 
that  had  a central  point  to  gather  information,  that  had  the  country 
districted  so  that  we  could  deliver  into  all  of  these  28,000  places  all 
the  products  in  the  United  States  as  we-  needed  them,  with  a compre- 
hensive system  like  the  five  packers  have,  then  we  would  have  the  dis- 
tribution on  a scientific  basis  and  none  of  us  would  be  starving,  but  we 
would  all  get  our  food  alike.  If  we  ever  get  brains  enough  to  start 
doing  that,  that  thing  can  be  done. 

Mr.  Aswell.  You  say  in  substance  that  the  decree  took  the  busi- 
ness away  from  the  packers  ? 

Mr.  Campbell.  Yes. 

Mr.  Aswell.  And  injured  the  producer  and  consumer  both  ? 

Mr.  Campbell.  Yes. 

Mr.  Aswell.  You  want  the  packers  to  handle  your  goods? 

Mr.  Campbell.  Sure  I do.  Why  not?  Who  are  they  injuring? 
They  don’t  injure  me  or  you.  If  we  have  to  have  a monopoly  to  get 
food  cheap,  let  us  have  the  monopoly,  let  us  get  cheap  food  and  more 
money  for  the  farmer.  I don’t  care  how  you  get  it,  but  let  us  get  our 
food  more  cheaply,  and  let  us  get  more  money  for  the  farmer.  If  we 
have  to  have  a monopoly,  let  us  have  a monopoly.  Now,  if  you  want 
to  control  the  packer,  well  and  good.  I don’t  care  anything  about 
that.  What  I want  is  the  facilities. 

Out  there  in  California  the  snows  and  rains  fall  on  the  mountains, 
and  the  water  runs  down  into  the  valleys  and  washes  everything 
away  unless  we  dig  ditches  and  distribute  the  water.  Now  your 
products  come  on  the  farm  in  the  same  way,  and  you  have  an  awful 
bunch  of  stuff,  and  you  have  to  have  a means  of  distributing  that. 
Just  now  we  can  not  distribute  these  products.  We  have  to  pick  the 
fruits  and  plow  up  the  products  of  the  soil  and  a great  deal  oi  that  is 
being  dumped  into  the  bay.  But  we  want  to  have  some  sort  of  sys- 
tem that  will  enable  us  to  carry  these  goods  to  all  parts  of  the 
country. 

We  have  an  enormous  nation,  and  we  can  not  do  business  on  a 
small  basis.  We  have  got  to  get  a knowledge  of  the  conditions  all 
over  the  country  at  some  central  point,  so  that  we  know  what  the 
situation  is  everywhere.  As  Secretary  Hoover  said  at  Atlantic  City 
the  other  day,  we  have  got  to  get  some  way  of  getting  knowledge 
of  our  supplies  and  distribution  at  some  central  point. 

I suggest  this  amendment  to  this  bill:  In  paragraph  (d),  section 
403,  line  21,  page  27,  add: 

Provided , however,  That  nothing  contained  in  this  act  shall  be  construed  to  prohibit 
or  prevent  the  packers  from  manufacturing,  purchasing,  storing,  selling,  or  handling 
on  commission  foods  or  food  products  other  than  live-stock  products. 

Or  if  you  have  got  some  people  so  radical  that  they  won’t  accept 
that,  then  say  this : 

Provided,  however,  That  nothing  contained  in  this  act  shall  be  construed  to  prohibit 
or  prevent  the  packers  from  handling  on  commission  foods  or  food  products  other  than  . 
live  stock. 

The  Chairman.  Let  me  read  to  you  from  the  Federal  Trade  Com- 
mission what  they  say.  It  is  just  one  or  two  lines: 

Not  only  have  monopolistic  control  over  the  American  meat  industry,  but  have 
secured  control,  similar  in  purpose,  if  not  yet  in  extent,  over  the  principal  substitutes 


106 


MEAT  PACKER. 


for  meats,  such  as  eggs,  cheese,  vegetable-oil  products,  and  are  rapidly  extending  their 
power  to  cover  fish  and  nearly  every  kind  of  foodstuffs. 

And  then  it  goes  on.  And  for  that  reason,  of  course,  they  were 
divorced  from  handling  or  acquiring  a monopoly  over  these  various 
things.  The  contention  is  that  the  monopoly  of  the  meat  industry 
is  bad,  and  that  if  that  is  bad,  then  it  is  just  as  bad  in  butter,  eggs,  1 
and  food  of  every  kind. 

Mr.  Campbell.  There  is  an  answer,  as  I told  the  Senate  Agriculture 
Committee  about  two  years  ago,  I think.  There  is  an  answer  to  all 
this  talk  about  monopoly.  We  answer  it  in  California  by  doing  the 
business  ourselves.  If  we  don’t  like  the  fellows  who  are  packing  the  , 
canned  foods,  we  can  them  ourselves.  If  we  con’t  like  the  fellows 
who  are  putting  up  the  dried  fruits,  we  do  it  ourselves;  that  is,  the 
farmers  do  it  themselves. 

Mr.  Tincher.  Suppose  that  report  is  absolutely  accurate,  and  they 
have  an  absolute  monopoly  in  the  meat  industry  and  in  these  unre-  j 
lated  lines,  could  you  conceive  a more  idiotic  way  of  curing  it  than 
of  absolutely  barring  them  from  dealing  in  it  ? 

Mr.  Campbell.  Let  us  illustrate  it  in  this  way:  The  railroads  now 
transport  all  sorts  of  things,  but  we  will  say  it  is  conceived  by  the 
Department  of  Justice  that  the  railroads  have  a monopoly  of  hauling  j 
things;  so  we  will  say  to  them,  “ You  can  haul  the  farmer’s  live  stock  j 
and  his  poultry  and  his  eggs,  but  you  can  not  haul  his  wheat  and  his 
fruit  and  his  corn.  You  have  got  to  let  that  go  by  truck  or  by  oxcart  \ 
or  something.”  Now,  it  is  the  same  thing  with  the  meat  packers’  ? 
distributing  system.  They  have  got  a system  that  is  exceedingly  j 
valuable  to  the  country,  and  we  ought  to  be  able  to  use  it.  We  ; 
haven’t  got  anything  to  compare  with  it.  And  why  destroy  those 
facilities  before  some  other  facilities  are  built  up  ? 

And  I want  to  submit  for  your  careful  consideration  an  amendment  ; 
along  the  lines  I suggested,  because  we  don’t  want  Congress  to  ) 
approve  of  the  continued  use  of  this  decree  system  in  government.  , 

Mr.  Jones.  Well,  now,  Mr.  Campbell,  granting  that  we  adopt  , 
your  amendment,  don’t  you  think  then  that  if  we  give  them  the  j 
privilege  of  engaging  in  all  kinds  of  transactions  that  all  those  l 
facilities  should  be  available  to  anyone  who  wants  to  use  them?  < 

Mr.  Campbell.  Surely. 

Mr.  Jones.  In  other  words,  that  they  should  not  be  limited;  t 
that  the  transportation  facilities,  or  any  part  of  them,  should  not 
be  limited  to  the  use  of  the  packers  ? 

Mr.  Campbell.  Well,  I don’t  know  how  radical  you  people  are. 

I am  not  radical. 

Mr.  Jones.  I am  asking  this  question  for  information.  I am 
seeking  information. 

Mr.  Campbell.  We  have  gotten  ourselves  in  bad  shape  in  the 
United  States  here  on  this  decree  business.  We  have  started  a 
precedent  here,  and  we  don’t  know  where  the  ramifications  are  going 
to  reach  to.  It  is  a dangerous  precedent.  I am  going  to  suggest  this, 
if  you  want  to  go  a little  further:  I would  say,  in  addition  to  what 
I have  suggested  as  an  amendment,  if  you  want  to  limit  them,  that 
you  limit  them  to  the  commission  basis,  where  the  farmer  owns  the  : 
stuff  that  is  sold;  they  don’t  own  it  at  all;  they  act  as  a common 
carrier  on  a commission  basis,  delivering  it  to  the  point  of  delivery  j 
on  a commission  basis,  andthensay,  u It  being  agreed  that  all  products  , 


MEAT  PACKER. 


107 


* handled  on  commission  shall  be  sold  at  prices  named  by  the  pro- 
ducers and  manufacturers,  and  that  the  same  price,  terms,  and  condi- 
tions of  sale  shall  be  made  to  all  who  offer  to  purchase  such  pro- 
visions.” Then  you  will  let  any  consumer  go  in  and  buy  the  stuff 
at  cost. 

Mr.  Tincher.  That  will  restore  their  right  to  retail,  which  is 
abrogated  by  that  decree. 

Mr.  Campbell.  Well,  it  would  restore  the  right  to  me  to  sell  to 
you  as  the  consumer  at  cost,  so  that  the  same  can  be  done  as  Henry 
Ford  is  doing  now;  he  is  selling  flour  at  half  the  price  that  it  costs 
at  retail,  and  he  is  making  the  flour  from  wheat  grown  on  his  own 
farm.  What  we  want  to  do  is  to  get  to  the  consumer  at  cost.  We 
are  selling  our  stuff  now  for  nothing,  and  the  consumer  is  paying 
10  prices.  Now  we  want  some  machine  to  break  through,  and  we 
think  the  packer  machine  is  strong  enough  to  break  through. 

Mr.  Aswell.  Who  is  responsible  for  that  condition  ? 

Mr.  Campbell.  The  waste. 

Mr.  Aswell.  In  what  ? 

Mr.  Campbell.  The  waste  in  distribution. 

Mr.  Aswell.  The  waste  in  distribution  ? 

Mr.  Campbell.  That  is  all  there  is  to  it — waste. 

Mr.  Clarke.  Do  you  mean  the  number  of  different  hands  it  passes 
through,  that  adding  onto  the  cost  ? 

Mr.  Campbell.  Not  only  the  number  of  different  hands  it  passes 
through,  but  the  waste  in  distribution.  Now,  I think  I can  explain 
that  so  you  will  easily  see  it.  If  we  pack  in  California  a carload  of 
vegetables  or  other  perishables,  and  they  are  forwarded  on  here,  we 
will  say  to  Chicago,  and  there  they  are  unloaded  into  a warehouse, 
and  we  pay  the  cost  of  unloading  and  warehousing  and  care  and 
attention,  and  then  they  are  redistributed  out  to  a little  jobber  in 
some  outlying  point  at  an  extra  cost  of  hauling  and  a waste  in  han- 
dling and  loss  because  of  breakage,  and  so  on,  and  then  they  get  to 
this  point,  and  they  are  distributed  out  there  again  to  a little  retail 
dealer,  the  continued  hauling  and  handling  and  clerk  hire  and  all 
those  sorts  of  things  constitute  a great  waste — not  only  a waste  in 
the  labor  involved  and  the  money  involved  in  each  transaction,  inter- 
est paid  on  this  money,  etc.,  but  in  the  actual  loss  of  the  articles 
I themselves  by  extra  handling  and  destruction  of  the  product,  so 
that  the  waste  in  our  system  of  distribution  is  enormous. 

A packer  will  take  it  in  these  tramp  cars  and  bring  the  product 
directly  to  the  small  retail  dealer  who  wants  it.  There  you  have  an 
economic  system  of  distribution. 

Mr.  Clarke.  Do  you  think  there  is  anything  in  the  criticism  that 
by  laying  down  a strict  mandatory  law  you  are  limiting  business  so 
! that  under  changing  conditions  it  can  not  evolve,  whereas  the  chang- 
| ing  conditions  can  be  met  through  decrees?  Do  you  think  there  is 
anything  in  that  criticism  ? 

Mr.  Campbell.  The  danger  of  decrees  is  this,  that  the  men  who 
promulgate  those  decrees,  who  work  those  decrees  out,  are  not  busi- 
ness men,  usually.  They  are  men  who  do  not  understand  distribu- 
i tion.  They  have  not  made  a life  study  of  it,  and  they  give  us  some- 
thing like  we  have  got  here,  which  is  wrecking  business.  Now,  what 
we  need  to-day  is  something  constructive,  not  destructive,  and  the 
(i  tendency  of  the  Federal  Trade  Commission  is  destructive,  because  it 


108 


MEAT  PACKER. 


has  given  us  no  constructive  program.  They  have  attacked  these 
growers’  organizations  in  California  because,  they  say,  we  are  organiz- 
ing in  restraint  of  trade,  whereas  we  are  only  asking  to  get  our  stuff  to 
the  consumers.  But  they  say  that  we  are  organizing  in  restraint  of 
trade,  and  instead  of  giving  us  any  constructive  program  their  tend- 
ency is  destructive. 

Mr.  Voigt.  The  men  that  are  back  of  this  decree — that  is,  the  bar 
you  are  complaining  about — are  the  wholesale  grocers  of  the  United 
States  ? 

Mr.  Campbell.  Of  course  their  interest  is  not  the  interest  of  the 
consumer  or  the  producer. 

Mr.  Voigt.  Well,  they  indulged  in  quite  extensive  propaganda 
among  the  Members  of  Congress  a year  or  so  ago,  so  when  you  say 
that  those  men  don’t  know  anything  about  business,  the  fact  is  they 
understood  their  business  too  well. 

Mr.  Campbell.  Well,  they  understood  their  side  of  it,  which  was 
to  get  all  they  could  out  of  the  producer  and  consumer. 

Mr.  Tincher.  You  ask  what  good  this  decree  did  anyway. 

Mr.  Campbell.  Yes. 

Mr.  Tincher.  Mr.  Palmer,  the  Attorney  General  of  the  United 
States,  appeared  before  this  committee  when  we  were  contemplating 
what  we  thought  was  constructive  legislation  concerning  the  packers, 
and  asked  us  to  desist,  and  to  not  pass  any  law,  stating  that  this 
decree  would  absolutely  be  satisfactory  within  a year,  to  every  per- 
son in  the  United  States,  and  that  there  would  not  be  any  occasion 
for  any  packer  regulation. 

Mr.  Campbell.  Well,  I will  tell  you;  we  have  faith  in  the  men  we 
elect  to  Congress.  We  elect  them  because  we  think  they  know  ! 
something  about  our  needs.  And  you  men,  representing  the  agri-  j 
cultural  interests  of  the  country,  and,  in  a way,  the  consumers,  we  j 
feel  that  you  are  more  competent  to  work  out  this  problem  in  the  I 
right  way  than  men  who  are  not  skilled  in  industry,  especially  the  j 
agricultural  interests  of  this  country,  and  we  don’t  like  to  have  j 
administrative  departments  destroying  our  industry  which  we  built  | 
up  after  many  years,  simply  by  these  consent  decrees.  The  farmers  ; 
are  not  going  to  stand  for  it.  We  are  going  to  rebel  against  those 
things.  We  are  going  to  fight.  If  necessary  our  farmers  will  write 
thousands  of  letters  in  on  the  decree  itself.  We  believe  that  this 
committee  can  fix  that. 

Mr.  Voigt.  Let  me  ask  you  a question.  You  would  like  to  see 
the  packers  put  into  a position  where  they  could  handle  your  product  ? J 

Mr.  Campbell.  Certainly. 

Mr.  Voigt.  They  can  handle  your  product  economically  because 
they  own  these  refrigerator  cars  ? 

Mr.  Campbell.  Certainly;  yes,  sir. 

Mr.  Voigt.  These  refrigerator  cars  are  a part  of  the  transporta- 
tion system  of  the  United  States  ? 

Mr.  Campbell.  Yes,  sir. 

Mr.  Voigt.  Now,  do  you  think  that  it  is  in  the  interest  of  the  j 
public — now  not  considering  your  particular  situation — is  it  in  the 
interest  of  the  public  to  have  a private  corporation  monopolize  a ; 
part  of  the  transportation  system  of  this  country  ? What  do  you  say 
about  that  ? 


MEAT  PACKER. 


109 


Mr.  Campbell.  That  depends  upon  how  they  handle  it. 

Mr.  Voigt.  Well,  let  us  assume  that  they  handle  it  well. 

Mr.  Campbell.  That  is  all  right.  I.  don’t  see  any  objection  to 

^Mr.  Voigt.  Would  you  favor  a scheme  under  which  every  man 
in  this  country  that  uses  the  railroads  to  a considerable  extent, 
should  use  his  own  private  cars  ? . 

Mr.  Campbell.  No;  because  that  would  mean  a contusion  ot 
handling  of  those  cars,  and  probably  considerable  waste  in  transpor- 
tation. . , 

Mr.  Voigt.  Then  your  contention  is  that  here  is  one  case  where  a 
private  corporation  should  have  a monopoly  of  a certain  part  of  the 
transportation  system  ? 

Mr.  Campbell.  I don’t  know  as  it  makes  much  difference  whether 
the  railroads  own  those  cars  or  the  meat  packers,  so  long  as  somebody 
who  had  proper  facilities  for  directing  those  cars  would  handle  them 

in  a proper  manner.  . 

Mr.  Voigt.  Well,  a railroad  is  a public. utility.  It  is  supposed  to 
render  Service  on  equal  terms  to  all.  Now  this  is  a question  of  prin- 
ciple with  me,  as  to  whether  a private  party  should  be  allowed  to 
control  a part  of  that  transportation  system. 

Mr.  Campbell.  Well,  I am  not  an  expert  on  that.  Of  course  1 
have  devoted  my  whole  life  to  the  production  of  foods  and  the  dis- 
tribution of  them.  N ow  whether  or  not  the  railroads  should  own  those 
cars  or  the  meat  packers  should  own  the  cars  I am  not  competent  to 
judge.  I would  not  want  to  pass  an  opinion  on  that. 

Mr.  Creigh.  Mr.  Chairman,  may  I say  a word  ? 

The  Chairman.  Yes.  . , 

Mr.  Creigh.  My  name  is  Thomas  Creigh,  representing  the  Cudahy 
Packing  Co.  I will  say  for  your  benefit  that  two-thirds  of  these 
route  cars  and  so  on  are  railroad  owned  cars  and  not  our  own  private 
cars.  I think  when  the  packers’  side  comes  up  it  will  be  more  proper 
to  take  this  up,  but  the  private  car,  and  all,  has  no  relation  to  the 
i private- car  system. 

The  Chairman.  Either  owned  or  leased  ? 

Mr.  Creigh.  No;  we  get  them.  We  procure  for  our  route  cars  at 
least  two-thirds  of  them,  from  the  carriers,  the  very  cars  that  we 
use  on  those  routes.  They  are  not  Cudahy-owned  cars. 

The  Chairman.  They  are  leased,  aren’t  they  ? 

Mr.  Creigh.  Only  as  you  or  anybody  else  would  order  a car  tor 
a particular  trip,  from  the  carriers. 

The  Chairman.  You  control  the  cars  absolutely? 

Mr.  Creigh.  Not  at  all.  We  don’t  control  the  cars  absolutely, 

not  at  all.  . 0 

The  Chairman.  Can  other  goods  be  shipped  m the  same  car « 

Mr.  Creigh.  No. 

The  Chairman.  Not  in  the  same  car? 

Mr.  Creigh.  No;  because  it  is  a carload  shipment  proposition. 
It  is  just  as  if  you  would  order  a car  for  cattle;  if  you  had  enough  to 
take  the  whole  car,  why  you  would  have  it. 

The  Chairman.  Do  you  pay  the  carload  rate  ? 

Mr.  Creigh.  We  pay  the  tariff  rate,  yes;  on  what  is  called  the 
! route  car  basis. 


110 


MEAT  PACKER. 


Mr.  Voigt.  In  connection  with  that  it  should  be  stated,  however, 
that  while  the  statement  which  is  made  by  this  gentleman  holds  true 
of  the  Cudahy  Packing  Co.,  the  report  of  the  Federal  Trade  Com- 
mission shows  that  the  five  big  packers  either  own  or  control  over  90 
per  cent  of  the  refrigerator  cars  of  this  country. 

Mr.  Creigh.  Again,  I would  like  to  make  a statement  on  that.  I 
am  sorry  to  take  up  this  time  here.  Of  course,  what  I am  saying  is 
as  regards  route  cars,  or  the  shipment  of  these  grocery  lines,  and  all 
that  sort  of  thing.  When  it  comes  to  beef  shipment,  the  Cudahy 
Packing  Co.  does  have  its  own  beef  cars,  and  I think  that  you  will 
find  that  the  ratio  of  beef  shipments  by  the  five  larger  packers  is 
perhaps  in  some  relation  to  the  cars  that  they  own.  In  other  words, 
the  bigger  packers  are  in  the  beef  business  very  extensively,  and  it 
is  by  far  the  most  economical  thing,  as  has  been  found  in  every 
investigation,  that  they  should  own  the  cars.  They  are  the  most 
efficient  car  in  the  world  as  far  as  getting  a mileage  out  of  them  is  ; 
concerned.  It  is  a big  story,  and  I apologize  for  taking  your  time. 

Mr.  Jones.  Before  the  decree  was  entered  that  you  refer  to  here 
did  you  have  a custom  of  putting  these  unrelated  products  in  the 
same  car  with  the  beef,  and  handling  it  in  that  way,  and  filling  out 
the  cars  with  other  products  ? 

Mr.  Creigh.  For  the  most  part  beef  is  rather  a carload  shipment.  < 
Now,  what  we  call  the  route  car,  which  is  where  we  get  in  trouble  ; 
largely  with  the  jobbers,  is  what  contains  all  sorts  of  meat  products 
as  distinguished  from  beef;  lard  and  compounds,  canned  fruits,  and  ! 
any  other  line  going  right  along,  paying  exactly  the  same  freight  , 
rates,  largely  on  an  L.  C.  L.  basis,  that  any  jobber  would  pay  to  the 
same  point. 

Mr.  Veeder.  May  I just  explain  in  a moment  the  refrigerator-car 
situation  ? 

The  Chairman.  Yes. 

Mr.  Veeder.  Now,  the  packers  own  these  cars  because  the  rail-  » 
roads  do  not  and  will  not  furnish  them.  The  packers  have  put  their  ) 
money  into  them.  They  operate  them  at  a loss.  Whenever  the  ; 
railroads  will  furnish  the  cars,  have  the  equipment  and  furnish  the  J 
cars,  the  packers  will  cease  operating  private  cars.  The  reason 
they  are  doing  it  to-day  is  that  they  can  not  get  cars  to  transport 
their  shipments  around  the  country.  If  a law  were  passed  requiring 
the  railroads  to  furnish  the  cars,  and  the  railroads  furnished  the  cars 
and  performed  the  service,  the  packer  cars  would  disappear,  because 
they  are  operated  at  practically  cost,  or  sometimes  at  less  than  cost, 
and  never  but  a little  over  cost.  Now  that  is  the  reason  they  are 
operating  the  cars,  and  that  is  the  reason  they  originally  went  into 
it,  and  that  is  the  reason  they  have  to  stay  in  this  business  of  operat- 
ing their  cars  to  distribute  their  products. 

Now,  another  thing.  There  is  no  limitation  upon  anybody  who 
has  product  to  distribute  in  sufficient  volume,  to  require  the  use  of  a 
string  of  cars,  from  getting  his  cars  just  as  the  large  packers  do,  and 
from  shipping  his  product  in  those  cars.  The  smaller  packers,  as 
fast  as  they  require  cars,  secure  them. 

The  reason  that  90  per  cent,  or  whatever  the  figure  is,  of  beef  cars 
were  owned  by  the  beef  packers  is  because  they  have  occasion  to  use 
90  per  cent  of  the  meat  cars  of  the  country.  There  is  no  manipula- 


MEAT  PACKER. 


Ill 


tion,  and  there  is  no  limitation  upon  anybody  building  cars  and  using 
them  just  as  fast  as  they  need  them.  There  is  no  limitation  upon  the 
railroads  building  them  and  furnishing  them,  except  the  financial 
; cost  of  the  investment.  And  as  I said  before,  the  answer  to  this 
whole  question  is  that  the  packers  will  go  out  of  the  car  business  if 
they  can  get  the  cars  and  when  they  can  get  the  cars  from  the  rail- 
road companies. 

The  Chairman.  What  is  the  cost  of  those  cars  ? 

Mr.  Veeder.  Well,  something  around  $2,000. 

Mr.  Creigh.  $3,000  now. 

Mr.  Veeder.  $3,000  nowadays. 

The  Chairman.  How  much  are  you  paid  a mile  ? 

Mr.  Veeder.  We  are  paid  practically  a cent  a mile. 

The  Chairman.  I just  wanted  to  get  it  in  the  record. 

Mr.  Marsh.  May  I ask  Mr.  Veeder  a question? 

The  Chairman.  I am  not  sure.  I rather  think  we  had  better  get 
through  with  this  witness.  We  had  a sort  of  a rule  here  established 
that  there  should  be  no  cross-examination  outside  of  the  committee. 
We  will  take  that  up  with  the  committee.  Shall  there  be  cross- 
examination  of  the  witness  outside  of  the  committee  ? 

Mr.  Clarke.  Let  us  finish  with  the  witness. 

Mr.  Campbell.  That  is  all  I have,  Mr.  Chairman,  if  you  are  through 
with  me. 

The  Chairman.  If  you  don’t  have  anything  more,  that  is  all,  Mr. 
Campbell.  Thank  you. 

Mr.  Campbell.  Nothing  at  all.  But  I would  like  to  have  Mr. 
Free  follow  me,  if  you  please. 

The  Chairman.  Are  there  any  questions  to  be  asked  ? 

■ Mr.  Voigt.  If  Mr.  Marsh  wants  to  ask  Mr.  Veeder  a question  I 
think  that  should  be  permitted. 

The  Chairman.  All  right. 

Mr.  Marsh.  Would  Mr.  Veeder  indorse  legislation  then  requiring 
the  railroads  to  acquire  all  the  refrigerator  cars  and  to  provide  them  ? 

The  Chairman.  Do  you  expect  to  take  that  question  up  ? 

Mr.  Veeder.  I will  say  this,  that  the  Interstate  Commerce  Com- 
mission had  a lengthy  investigation  of  the  private  car  system  three 
years  ago,  and  their  conclusion  was  that  the  present  system  of  private 
[distribution  of  meat,  that  is,  the  distribution  where  there  was  a 
[ constant  travel  back  and  forth  between  two  definite  points  in  the 
I distribution  of  meat  was  cheaper,  and  alsoi  n the  distribution,  of 
fruits,  where  the  cars  had  to  be  back  in  quantities.  One  time  they 
> are  out  in  California,  another  time  in  Georgia.  Their  conclusion  was 
: that  it  was  cheaper  than  to  require  the  railroads  to  own  and  operate 
i their  cars. 

! Now,  I will  say  again  that  I am  not  going  to  say  that  I indorse 
[ legislation  that  will  require  the  railroads  to  furnish  the  cars.  It 
! might  be  that  they  would  not  perform  the  service  satisfactorily  if 
they  did.  I don’t  know.  But  I will  say  this,  which  is  repetition  of 
what  I said  before,  that  whenever  the  railroads  furnish  the  cars  and 
the  service  you  will  see  the  private  cars  disappear,  because  the 
Interstate  Commerce  Commission  itself  in  its  decision  has  stated  that 
they  are  operated  at  practically  cost.  Now,  the  packers  will  use 
their  money  in  the  packing  business  if  they  can  get  their  meat  dis- 
tributed, and  whenever  the  cars  and  service  are  furnished  by  anyone 


112 


MEAT  PACKER. 


else — private  owner  or  railroad  company — to  them,  they  will  dis-  j 
tribute  their  meats  through  that  service  and  not  furnish  the  cars 
themselves. 

Now,  I would  like  to  just  say  one  word  about  this  90  per  cent  of 
the  private  cars.  The  big  packers,  as  I said  before,  probably  control 
90  per  cent — each  have  their  own  systems — of  the  beef  cars  of  the 
country,  for  the  reason  that  they  have  occasion  to  ship  perhaps  90 
per  cent  of  the  meat  that  is  shipped  in  commerce.  That  does  not  ! 
mean  that  the  big  packers,  the  five  of  them  taken  in  the  aggregate,  j 
are  doing  90  per  cent  of  the  meat  business  of  the  country.  I don’t  j 
want  that  misunderstood.  That  point  has  been  elaborated  pro  and 
con  here  so  much  that  I am  not  going  into  it.  But  they  only  do 
about  50  per  cent,  or  less,  of  the  meat  business  of  the  country.  Now, 
that  is  due  to  the  fact  that  all  over  this  country  there  are  small 
packers  who  only  have  a few  or  no  refrigerator  cars;  there  are  thou- 
sands of  them,  butchers  and  packers,  all  over  the  country.  There  j 
are  thousands  of  them  slaughtering  locally,  and  slaughtering  meats  1 
shipped  to  them  on  the  hoof  from  the  cattle  centers  and  the  stock-  j 
yard  centers. 

Mr.  Voigt.  Now,  getting  back  to  Mr.  Marsh’s  question:  Would  you  ] 
care  to  answer  that  question  yes  or  no  ? You  made  a long  explana-  j 
tion  there  now.  I think  you  ought  to  be  candid  and  answer  that  ; 
gentleman’s  question. 

Mr.  Veeder.  Well,  I don’t  know  as  I remember  the  question.  I 
would  like  to  hear  Mr.  Marsh’s  question  again. 

(The  question  asked  by  Mr.  Marsh  was  read  by  the  reporter,  as  J 
follows :) 

Would  Mr.  Veeder  indorse  legislation,  then,  requiring  the  railroads  to  acquire  all  1 
the  refrigerator  cars  and  to  provide  them? 

Mr.  Veeder.  I can’t  say  yes  or  no  to  that  for  this  reason,  that  j 
this  is  a very  large  question.  From  the  packer  point  of  view  I will  ( 
say  yes.  But  it  would  require  an  enormous  investment  for  the  j 
railroads  at  this  time,  and  they  claim  they  are  losing  money.  That  ) 
may  be  wastage.  It  makes  no  difference  what  it  is.  It  is  a large  \ 
economic  question.  It  would  require  the  railroads  to  furnish  many  j 
times  the  number  of  refrigerator  cars  that  it  requires  the  private  ;J 
owner  to  furnish,  for  the  reason  that  if  every  railroad  has  got  to  ] 
furnish  all  the  cars  needed  on  its  railroad  it. is  going  to  have  them 
stand  idle  for  a great  portion  of  the  year,  while  if  the  cars  are  owned 
by  some  central  institution  or  private  ownership,  all  of  the  cars  may 
be  parked — or  as  many  as  may  be  necessary  may  be  parked — in 
California  for  the  purpose  of  bringing  the  fruit  east  from  California 
during  the  fruit  season,  or  all  of  them  may  be  sent  down  to  Georgia. 

If  the  railroads  own  them  ^ou  will  find  that  it  will  take  10  times  as 
many  private  cars;  that  it  will  take  10  times  the  investment  for  the 
railroads  to  furnish  this  service  that  the  private  owner  furnishes. 

It  will  cost  the  railroads  10  times  as  much  in  investment  in  cars  as 
it  does  the  private  owner. 

Now  that  might  be  answered  by  having  some  central  owner  who 
may  switch  these  cars  from  the  Atlantic  to  the  Pacific  as  needed. 
But  that  has  got  to  be  provided.  Now  that  is  a great  big  economic 
question  and  can  not  be  answered  yes  or  no.  And  as  I said  before, 

I answer  yes,  if  the  question  is  simply  whether  the  packers  would  j 


MEAT  PACKER.  113 

like  to  have  the  cars  and  service  furnished  by  somebody  else  other 
than  themselves. 

Mr.  Tincher.  Under  the  present  law  the  Interstate  Commerce 
Commission  has  the  power,  as  I understand  the  law,  to  require  the 
carrier  to  furnish  these  facilities. 

Mr.  Veeder.  They  have  the  power  to  require  the  carriers  to 
furnish  all  special  equipment;  under  the  law,  as  I understand,  the 
commission  has  the  power,  in  its  discretion,  to  require  the  carriers 
to  furnish  all  special  equipment,  which  includes  refrigerator  cars. 

Now,  Mr.  Creigh  called  my  attention  to  one  thing.  I think  you 
will  find  that  there  has  been  no  complaint  filed  with  regard  to  ship- 

fers  not  getting  cars.  I believe  Mr.  Creigh  can  explain  better  than 
can. 

Mr.  Creigh.  I think  under  the  Esch-Cummins  Act  the  commis- 
sion goes  into  operation  when  a shipper  files  a complaint  with  them 
that  he  has  been  unable  to  get  any  cars.  I should  say  that  while 
the  act  has  been  in  effect  you  will  find  no  complaints  of  that  kind. 
Of  course  that  is  the  machinery  under  which  this  can  be  put  into 
operation. 

Mr.  Tincher.  What  I was  getting  at  was  whether  we  needed  any 
legislation  on  that  subject  or  not.  Now  here  is  a little  packer  out 
in  Hutchinson,  Kans.,  who  is  in  competition  with  the  Big  Five 
packers,  who  have  their  own  refrigerator  cars.  Now,  the  law  is 
that  the  Interstate  Commerce  Commission  have  the  power  to  make 
the  transportation  company  furnish  him  a refrigerator  car. 

Mr.  Creigh.  I think  that  is  the  law,  and  as  I say,  the  law  has 
been  in  effect  more  than  a year  now,  and  I doubt  whether  there  has 
been  any  complaint.  Hence  the  theoretical  objection,  I say,  does 
not  exist  now  at  the  present  time. 

Mr.  Tincher.  I don't  know,  if  we  pass  a mandatory  law  that  the 
transportation  companies  should  furnish  all  the  refrigerator  cars, 
how  we  would  raise  the  money. 

Mr.  Creigh.  Mr.  Marsh  was  making  an  argument  a while  ago 
that  the  present  railroad  operation  is  in  certain  respect  uneconomi- 
cal. Now  I have  been  in  these  car  cases  for  so  many  years  that  I 
think  I know  something  about  the  situation,  and  I say,  in  view  of 
the  finding  of  the  Interstate  Commerce  Commission,  which  is  in- 
disputably correct,  the  present  system  is  by  far  the  most  economical. 

Now  our  situation — that  is,  speaking  for  the  Cudahy  people — 
would  be  the  same  as  Mr.  Veeder’s.  We  want  the  service.  We  don't 
get  any  profit  out  of  the  car  investment.  But  when  it  comes  to  the 
question  of  taking  our  cars  away  and  giving  them  to  the  carriers, 
why  immediately  I know  that  the  carriers  are  going  to  have  at  least 
four  or  five  times  as  much  cost;  that  the  carriers  will  need  four  or  five 
times  the  capital  investment  necessary  to  provide  for  it  under  ordinary 
car  movement  as  is  now  needed.  Now  somebody  is  going  to  pay 
that.  Somebody  has  got  to  pay  for  it,  and  somebody  is  going  to  suffer 
as  the  result. 

Mr.  Voigt.  Well,  you  packers  claim  that  you  are  operating  these 
cars  at  a loss,  but  you  are  not  kicking  very  hard  and  asking  to  be 
relieved  of  that  loss.  You  don’t  come  before  this  committee  or  any 
other  committee  and  say,  “We  are  losing  money  and  we  want  to  get 
rid  of  these  cars.” 


46985—21 8 


114 


MEAT  PACKER. 


Mr.  Veeder.  The  fact  has  been  established  after  three  years,  or 
pretty  nearly  three  years  of  hearings  or  investigations  on  the  part 
of  the  Interstate  Commerce  Commission.  Now  what  we  want,  in 
spite  of  the  fact  that  we  are  operating  the  cars  at  practically  cost, 
is  the  service,  and  that  we  have  got  to  have.  We  are  distributing  a 
highly  perishable  product.  We  have  got  to  have  the  cars  on  hand  for 
immediate  shipment.  We  can  not  hold  this  perishable  product 
awaiting  delivery  of  cars  by  the  railroads  if  they  have  to  send  to 
some  distant  point  and  get  them.  We  can  not  wait  until  the  railroad 
switches  in  cars  from  San  Francisco,  for  example,  where  they  have 
sent  them  to  be  parked,  or  some  other  place. 

We  have  got  to  have  the  service  or  go  out  of  business.  We  have 
got  to  have  these  cars  immediately  in  order  to  handle  this  perishable 
product  before  it  turns.  We  have  got  to  ship  it  in  the  quickest 
possible  time  in  order  to  allow  the  retailer  to  carry  it  for  a time  before 
it  begins  to  spoil.  We  have  got  to  move  it  quickly,  handle  it  quickly, 
and  the  only  way  that  we  can  handle  it  quickly  is  to  have  the  car 
there  ready  when  it  is  to  be  moved.  Now  unless  the  railroads  are  in 
a position  to  furnish  enough  cars  so  that  they  will  always  have  equip- 
ment at  the  point  where  needed,  why  the  service  won’t  be  satis- 
factory, and  the  meat  distribution  of  this  country  will  be  wrecked. 
Now  they  can  not  do  that  unless  they  have  several  times  the  num- 
ber of  cars  to  perform  the  service  that  we  have. 

The  Chairman.  Have  you  anything  further,  Mr.  Campbell  ? 

Mr.  Campbell.  No. 

The  Chairman.  We  will  hear  from  you  then,  Mr.  Free. 

STATEMENT  BY  HON.  ARTHUR  FREE,  A MEMBER  OF  CONGRESS 
FROM  THE  EIGHTH  DISTRICT  OF  CALIFORNIA. 

Mr.  Free.  Mr.  Chairman,  I don’t  feel  like  taking  up  the  time  of  the 
committee,  for  I know  you  have  a great  deal  of  work  to  do  and  a great 
number  of  people  to  hear,  but  I was  anxious  that  Mr.  Campbell 
should  have  the  opportunity  to  present  the  thought  that  he  pre- 
sented here. 

I am  a Member  of  the  Congress  from  the  eighth  district  of  Cali- 
fornia, where  some  of  these  farmers’  canneries  exist.  In  addition  to 
the  canneries  represented  by  Mr.  Campbell  we  have  some  34  others. 

Now,  I have  been  satisfied  since  coming  here,  and  particularly 
just  recently  after  having  attended  the  conference  of  the  United 
States  Chamber  of  Commerce  at  Atlantic  City,  that  the  people  of  the 
East  and  even  of  the  Middle  West  have  no  conception  of  our  prob- 
lems in  California.  In  order  that  you  may  see  what  our  distributing 
problem  is,  I want  to  quote  a few  figures  to  you. 

For  instance,  California  produces  150,000  tons  of  dried  prunes,. 
190,000  tons  of  raisins,  14,500  tons  of  dried  apricots,  and  35,000  tons 
of  dried  peaches. 

Now,  I could  go  on  down  the  list  and  show  you,  in  addition  ta 
that,  13,450,000  cases  of  canned  fruits  and  a number  of  other  products. 

Now,  up  to  the  time  of  the  destruction  of  the  distributive  system 
of  the  packers,  by  the  1st  of  January  or  the  1st  of  February,  we  had 
our  packing  houses  cleaned  up  and  the  products  were  on  the  way 
to  the  consumers.  And,  by  the  way,  I am  a fruit  grower  out  there 


MEAT  PACKER. 


115 


in  California;  I am  a member  of  the  organization  that  Mr.  Campbell 
is  the  manager  of.  I have  been  associated  with  those  associations 
and  organizations  there  since  I was  ,a  boy. 

Now,  when  I left  California  60  per  cent  of  the  crop  was  still  in  the 
packing  houses,  and  in  the  southern  end  of  my  district  the  most 
beautiful  lemons  in  the  world  were  being  thrown  into  ditches  and  could 
not  be  sold  for  any  price.  And  then  I arrived  here  in  Washington. 
I paid  40  cents  a dozen  for  lemons,  or  at  the  rate  of  $10  per  box.  I 
paid  10  cents  apiece  for  apples  here,  or  $15  to  $20  a box,  when  out 
there  those  apples  are  absolutely  being  thrown  away. 

Now,  gentlemen,  it  seems  to  me  that  it  is  time  for  courage  on  the 
part  of  this  Congress.  Since  I have  been  here  I have  seen  all  sorts 
of  destructive  things.  People  want  to  do  away  with  this  tax  and 
that  tax  and  give  you  no  other  tax  in  its  place.  They  want  to  take 
away  one  distributive  system  and  give  you  nothing  in  its  place.  I 
perhaps  ought  not  to  say  this,  and  I don’t  want  it  to  be  understood 
as  perhaps  it  may  sound,  but,  so  far  as  we  have  been  able  to  view  the 
Federal  Trade  Commission  from  out  there  in  California,  it  is  abso- 
lutely destructive,  and  is  giving  us  nothing  constructive  to  take  care 
of  our  problems.  And  you,  the  Agricultural  Committee  of  this 
Congress,  it  seems  to  me,  should  take  hold  of  this  problem  and  see 
that  we  do  get  distribution. 

Now,  in  order  that  you  may  understand  this  peddler-car  system — 
perhaps  you  do — let  me  explain  it  to  you.  This  peddler-car  system 
has  been  of  great  value  to  us  there.  They  send  out  their  salesman. 
They  go  around  to  the  little  groceries,  to  the  little  corner  stores,  and 
they  take  an  order  for  so  many  hams  and  for  so  many  slabs  of  bacon, 
so  much  mush,  so  much  canned  fruit,  and  all  that  sort  of  thing,  and 
then  they  start  a car  out  along  that  route,  and  along  comes  our 
stuff,  and  it  is  sold  and  distributed  to  the  consumer. 

Now  if  you  want  to  solve  this  problem,  gentlemen,  put  in  this  bill 
a rider  to  the  effect  that  that  consent  decree  shall  be  set  aside  so  far 
as  the  distribution  of  those  products  is  concerned  and  have  these 
distributors  distribute  on  a commission  basis.  There  is  the  answer 
to  the  whole  thing.  Let  the  farmer  own  the  product  until  it  reaches 
the  consumer,  and  the  packer  will  distribute  on  a commission  basis, 
and  you  will  get  the  fruit,  or  whatever  it  is,  distributed  at  a reasonable 
cost. 

Now  I don’t  want  to  take  any  more  of  your  time,  because  I realize 
that  you  have  a great  many  people  to  hear.  But  I just  wanted  to 
give  you  those  facts. 

Mr.  Clague.  Go  ahead. 

The  Chairman.  We  are  very  much  interested  in  what  you  are 
saying.  This  is  a very  interesting  question. 

Mr.  Clague.  Take  all  the  time  you  want. 

Mr.  Free.  Let  me  illustrate  to  you  another  thing  in  California. 
As  I was  coming  through  from  California  to  Washington  I stopped 
in  Minnesota.  And  I asked  a retail  grocer  there  what  he  was  paying 
for  onions,  and  he  told  me  10  cents  a pound — $10  a sack.  And, 
gentlemen,  I saw  some  of  the  most  beautiful  onions  out  there  in 
California  that  the  United  States  could  possibly  grow  plowed  up 
and  thrown  away  because  we  could  not  sell  them.  And  the  same  is 
true  of  peaches,  almonds,  nuts,  various  fruits,  grain,  whatever  line 
you  go  into;  we  haven’t  got  the  proper  distributive  system. 


116 


MEAT  PACKER. 


Now  here  is  another  thing  about  it.  Some  tears  have  been  shed 
about  the  wholesale  grocers.  They  are  the  biggest  bunch  of  hold-up 
men  in  the  world  when  it  comes  to  California  products.  *3 1 c\  y ill 
absolutely  prohibit  a cooperative  concern  from  selling  to  its  own 
members,  and  threaten  to  boycott  it.  And  if  you  gentlemen  want 
the  literature  I can  show  you  where  they  advocate  the  boycott  of  a 
cooperative  concern  in  California  because  they  tried  to  sell  to  their 
own  members  at  somewhere  near  cost. 

Now  you  talk  about  this  decree.  I can  see  how  that  came.  Here 
were  the  packers  with  a pistol  against  their  heads,  and  what  were 
they  going  to  do  ? Were  they  going  to  go  to  jail,  or  were  they  going 
to  submit  to  this  thing  ? And  they  submitted.  And  now  they  have 
got  them  out  of  their  best  side  line. 

Now  the  vicious  thing  about  the  decree  is  the  fact  that  there  isn’t 
one  of  these  organizations  that  can  take  1 pound  of  California 
product  and  send  it  to  England  or  France  or  Italy  or  any  other  place. 
Now  if  you  want  to  protect  the  thing  at  home  here,  for  God’s  sake 
why  prohibit  us  from  distributing  our  goods  abroad  ? To  illustrate 
to  you  what  it  has  meant  to  us  let  me  say  that  we  exported  some- 
thing like  60  per  cent  of  the  dried  prunes  of  California  to  Europe 
heretofore,  and  this  year  we  have  not  been  able  to  export  a single  ; 
pound.  We  have  exported  40  per  cent  of  the  canned  goods  up  to  i| 
this  time,  and  this  year  we  can  not  export  a single  pound.  And  I i| 
know  that,  because  I am  a member  of  the  organization  that  Mr. 
Campbell  belongs  to,  and  we  have  got  to  go  over  to  Europe  and  get  ] 
a European  concern  to  come  over  and  try  to  handle  some  of  our 
products,  because  no  concern  in  the  United  States  that  has  the 
facilities  is  able  to  do  it. 

Mr.  Clarke.  Isn’t  the  rate  of  exchange  one  of  the  answers  to  that 
question  at  the  present  time  ? 

Mr.  Free.  We  are  willing  to  take  the  chance  on  the  rate  of  t 
exchange,  sir. 

Mr.  Clarke.  In  other  words,  you  will  accept  their  paper? 

Mr.  Free.  Yes.  Another  trouble  that  we  are  up  against  in  our ; 
fruit  industry  out  there,  gentlemen,  is  this:  Our  banker  says  to  us,  ! 
“You  have  your  product  sold  and  we  will  loan  you  money  to  put  up 
your  stuff.”  Now,  we  are  canning  our  fruit.  Let  us  see  what  goes 
into  the  can.  There  is  the  can  itself,  there  is  the  labor,  there  is  the 
fruit,  there  is  the  sugar,  and  there  is  the  label.  The  farmer  is  willing 
to  take  his  chance  on  the  fruit,  but  he  has  got  to  pay  for  those  other 
three  items.  The  banker  out  there,  because  of  the  taking  away  of 
their  distributive  system,  says,  “You  have  got  to  have  your  stuff 
sold  before  we  can  loan  you  any  money  to  pack  it.”  You  come  on 
eas.t  here  and  try  to  get  a contract  for  your  fruit.  I was  talking  to 
one  of  the  members  of  the  independent  canneries,  as  we  call  them 
out  there,  and  he  tells  me  that  he  can  not  get  a single  contract  for 
this  coming  year  for  the  sale  of  his  stuff.  In  other  words,  here  is  the 
wholesale  grocer  and  the  jobber  saying,  “I  won’t  buy.”  Here  is 
your  banker  saying,  “I  won’t  loan  you  the  money  to  pack  until  you 
have  orders.”  With  the  result  that  this  year,  unless  something 
heroic  is  done,  the  fruit  in  California  is  going  to  rot  on  the  ground, 
while  the  people  here  in  the  east  would  like  to  eat  the  fruit,  but  they  j 
can  not  get  it. 


MEAT  PACKER.  117 

Now,  I could  continue  talking  along  this  line  for  a considerable 
time,  but  I don’t  want  to  take  any  more  of  your  time. 

Mr.  Tincher.  We  have  been  talking  for  years  about  packer  legis- 
lation. This  decree  makes  it  absolutely  necessary  now  that  we  do 
have  some  packer  legislation,  doesn’t  it? 

Mr.  Free.  Yes;  to  put  them  back  in  the  business.  I will  tell  you 
the  objections  that  I have  heard.  I have  talked  about  this  thing  to 
everybody  whose  ear  I can  get,  because  it  affects  A.  M.  Free  finan- 
cially; I own  an  orchard  out  there,  and  in  addition  to  that  I represent 
a good  bunch  of  people  out  there.  They  will  say,  and  the  chairman 
of  this  committee  may  say  the  same,  that  you  are  going  to  create  a 
big  distributive  system  and  make  the  consumer  subject  to  that 
system.  Suppose  you  do.  Then  you  can  regulate  it,  can’t  you,  as 
we  do  the  railroads?  We  can  give  them  proper  regulation,  and,  if 
necessary,  put  them  under  some  department  and  see  that  they  shall 
charge  no  greater  commission  for  the  distribution  of  these  products 
than  the  Commissioner  of  Agriculture,  or  some  other  proper  authority, 
would  approve. 

Now,  we  can  put  fruit  into  this  market  at  less  than  half  of  what  you 
are  paying  for  it.  We  can  put  lemons  here  in  this  market  at  15  cents 
a dozen,  whereas  you  are  now  paying  40  cents  a dozen.  We  can  put 
in  apples  for  you  here  to-day  at  $2  a box,  where  you  are  now  paying 
$20  a box,  and  we  would  be  mighty  glad  to  do  it. 

Mr.  Clarke.  Just  a moment,  Mr.  Free.  You  have  pooling  asso- 
ciations out  there,  haven’t  you  ? 

Mr.  Free.  Yes. 

Mr.  Clarke.  Now,  do  these  pooling  associations  take  the  entire 
product  of  different  communities  which  are  shipping  it  in  here  and 
put  it  in  warehouses,  and  then  regulate  the  price  of  it  when  it  goes 
out  ? 

Mr.  Free.  No;  there  is  one  association  in  California  that  some- 
what approaches  that.  That  is  the  California  Fruit  Exchange. 
They  handle  the  citrus  fruits  of  California.  They  have  an  informa- 
tion bureau  throughout  the  United  States  by  which  they  know  the 
markets,  and  they  put  the  citrus  fruits  into  the  markets  so  there  is 
never  a surplus,  and  to  a degree  they  fix  the  price. 

Mr.  Clarke.  In  other  words,  they  don’t  permit  any  surplus  to  get 
into  the  warehouses  and  get  into  the  final  distributors’  hands  ? 

Mr.  Free.  No. 

Mr.  Clarke.  Now,  just  a moment.  I want  to  go  a step  further  on 
that.  Now,  isn’t  the  effect  of  that  pooling  association  there  that  the 
cost  of  the  fruit  is  higher?  Doesn’t  the  practical  effect  of  it  mean 
that  we,  as  consumers,  have  to  pay  a good  deal  more  ? 

Mr.  Free.  No. 

Mr.  Clarke.  No? 

Mr.  Free.  No;  you  pay  less. 

Mr.  Clarke.  That  is  what  I want  to  know. 

Mr.  Free.  Those  concerns  out  there  realize  that  their  salvation 
lies  in  selling  at  a moderate  price,  and  if  they  can  sell  at  a moderate 
price  and  cut  out  the  waste  and  the  extravagance,  and  if  they  were 
permitted  to  put  the  price  on  the  article  itself,  they  would  be  de- 
lighted to  do  it.  They  realize  that  their  salvation  is  selling  at  a 
moderate  price. 


118 


MEAT  PACKER. 


Now,  another  thing  about  it.  There  is  no  organization  in  California 
unless  it  be  the  Raisin  Association  that  has  the  control  of  any  one 
product.  For  instance,  the  concern  that  Mr.  Campbell  represents 
here;  he  represents,  I think,  about  seven  canneries. 

Mr.  Clarke.  My  thought  is  this:  Now  then,  with  all  of  these 
different  products  of  your  State  that  we  are  paying  so  enormously 
high  for  here,  and  with  all  this  going  to  waste  out  in  your  native  State 
there,  why  shouldn’t  that  wastage  be  brought  into  this  market  ? Or 
could  it  be  brought  into  this  market.  ? Is  there  any  practical  answer 
to  that  question  ? 

Mr.  Free.  Yes.  The  trouble  with  the  thing  is  that  there  is  no 
organization  there  that  is  strong  enough  to  finance  distribution.  If 
all  the  organizations  were  together  they  could  do  it. 

Mr.  Clarke.  Yes. 

Mr.  Gernerd.  In  other  words,  if  you  could  combine  these  un- 
related products  into  an  organization  like  the  fruit  growers’  organ- 
ization of  California,  that  would  obviate  the  necessity  of  your  going 
to  the  packers  to  have  these  products  distributed  ? 

Mr.  Free.  Yes. 

Mr.  Gernerd.  But  you  are  not  big  enough,  you  are  not  strong 
enough,  to  be  able  to  do  that  ? 

Mr.  Free.  No,  sir. 

Mr.  Voigt.  Now,  you  say  that  you  can  not  sell  in  Europe  this  year 
and  that  you  could  sell  in  Europe  last  year.  You  don’t  attribute 
that  to  the  fact  that  the  distribution  system  has  been  broken  down  ? 

Mr.  Free.  Yes;  I attribute  that  to  the  breakdown  of  the  distri- 
bution system — part  of  it.  The  market  in  Europe  is  picking  up. 

I know  one  concern  in  California,  the  entire  output  of  which,  or 
practically  the  entire  output,  Armour  & Co.  would  take  and  market 
lor  them  in  England  this  coming  year,  but,  by  reason  of  this  decree, 
they  are  not  able  to  do  it,  because  they  can  not  indulge  in  either  j 
internal  or  external  trade. 

Mr.  Voigt.  The  southern  cotton  growers  claim  to  be  in  a fix  be- 
cause they  can  not  sell  their  cotton  to  Europe. 

Mr.  Free.  Well,  understand  me,  I don’t  minimize  the  exchange 
situation  at  all. 

Mr.  Voigt.  Their  cotton  is  not  handled  by  the  packers  ? 

Mr.  Free.  No.  Now,  I don’t  minimize  the  exchange  situation  at 
all,  but  I do  say  that  there  are  markets  in  places,  and  if  some  of  these 
local  concerns  we  are  putting  out  of  business  were  permitted  to  op- 
erate, they  could  utilize  them.  Take  a concern  like  Armour  & Co. 

I was  told  at  one  time  that  they  have  something  like  1,700  distributing 
points  throughout  the  world.  Now,  they  would  send  our  products 
down  into  Argentina,  into  South  America;  they  would  send  them  even 
over  to  China,  to  Japan,  Australia,  and  other  parts  of  the  world,  j 
Now  we  can  not  take  advantage  of  that  system  even  outside  of  the 
United  States. 

The  Chairman.  Aren’t  there  others  engaged  in  the  business  of  i 
distributing  fruits  ? 

Mr.  Free.  You  only  have  your  jobbers  and  your  wholesale  grocers, 
and  they  have  operated  on  this  plan,  that  they  buy  and  sell,  and 
owing  to  the  fact  that  there  is  a falling  market  they  refuse  to  buy  in 
a year  like  this. 


MEAT  PACKER.  119 

The  Chairman.  I understand  that  your  fruit  is  largely  shipped  to 
oities  and  sold  by  auction;  is  that  it? 

Mr.  Free.  Oh,  that  is  true  of  some  green  fruits,  like  ripe  cherries 
and  things  like  that.  But  that  isn’t  true,  however,  of  the  canned 
fruits  or  the  dried  fruits. 

The  Chairman.  That  is  only  a small  portion  ? 

Mr.  Free.  Yes,  sir;  just  a little  bit.  The  cherry  output  and  some 
green  fruits  like  that.  That  is  all. 

The  Chairman.  I take  it  that  you  have  other  troubles  than  the 
doing  away  with  the  peddler  cars  ? 

Mr.  Free.  What  is  that? 

The  Chairman.  I say,  you  have  other  troubles  ? 

Mr.  Free.  Yes.  Of  course,  the  increase  in  freight  rates  has  made 
a big  difference,  but  it  does  not  account  for  it  all.  For  instance,  the 
difference  between  getting  nothing  for  your  lemons  in  California  and 
paying  $9  or  $10  a box  here  is  not  represented  by  freight  alone,  be- 
cause the  freight  and  refrigeration  would  probably  mean  $1.50  a box 
on  lemons.  And  take  apples;  the  difference  between  nothing  and 
$15  or  $20  a box  would  not  be  represented  by  freight;  there  the  cost 
would  not  be  over  $1.50  for  refrigeration. 

The  Chairman.  I have  heard  it  stated  quite  frequently  that  the 
market  price  in  Washington  was  less  than  the  cost  of  transporting 
from  Georgia. 

Mr.  Free.  Well,  that  might  be  on  some  products.  Of  course,  we 
are  a little  bit  fortunate  in  California  in  one  way,  in  that  we  have 
water  transportation  from  San  Francisco  and  the  coast  there  into  the 
cities  on  the  Atlantic  coast.  And  right  now  the  prune  and  apricot 
association,  owing  to  the  condition,  are  establishing  packing  houses 
in  New  York,  sending  their  product  around  through  the  canal,  and 
peddling  it  out.  Where  they  used  to  sell  it  in  10-carload  lots  they  are 
now  peddling  it  out  in  carload  lots,  practically  as  retailers,  without 
any  system  of  distribution,  just  at  the  mercy  of  whoever  happens  to 
buy. 

Mr.  Voigt.  You  say  that  the  wholesalers  are  not  buying  on  this 
falling  market  ? 

I Mr.  Free.  No. 

Mr.  Voigt.  Suppose  the  packers  had  the  legal  right  to  buy,  do  you 
suppose  they  would  be  buying  if  the  wholesalers  can  not  ? 

Mr.  Free.  I know  that  one  concern  had  a contract  for  10  years, 
and  when  this  decree  was  entered,  that,  of  course,  ended  that  contract. 
I know  that  they  took  care  of  the  output  of  10  canneries  in  California. 
Now  they  were  bound  under  that  contract,  and  they  would  have 
- continued  operating  under  that  contract.  But  I am  not  advocating 
putting  them  back  to  that  position.  I am  advocating  that  they  be 
permitted  to  handle  it  on  the  commission  basis,  and  that  you  perfect 
some  legislation  to  give  us  access  to  their  distributive  system. 

Mr.  Gernerd.  In  other  words,  to  regulate  the  packing  system, 
whether  it  is  the  packing  system  or  transportation  of  meats;  but  so 
that  there  is  no  undue  discrimination  ? 

Mr.  Free.  Yes.  Let  any  man,  whether  he  be  a lemon  grower  or  a 
prune  grower  or  an  apricot  grower,  have  an  opportunity  to  offer  his 
product  to  these  concerns,  and  say,  “Here,  you  sell  these  for  me  on  a 
commission,”  and  they  take  the  product  and  they  sell  it  and  take 


120 


MEAT  PACKER. 


out  their  commission.  Now,  I have  understood,  although  I have 
not  verified  it,  that  they  have  sold  on  as  low  a turnover  as  2 per  cent 
on  some  of  the  California  products;  and  if  they  could  do  it  then  for  as 
low  as  2 per  cent,  suppose  now  that  it  costs  8 or  10  per  cent  to  do  it, 
why  that  beats  50  per  cent  or  100  per  cent  or  200  or  300  per  cent 
which  you  are  getting  now. 

The  Chairman.  You  suggest,  then,  limiting  them  to  commission 
business,  strictly  commission  business? 

Mr.  Free.  Yes. 

The  Chairman.  Well,  wouldn’t  that  work  to  the  disadvantage  of 
some  one  who  would  not  be  able  to  place  it  at  their  disposal  on  a 
commission — a smaller  dealer,  I mean? 

Mr.  Free.  I am  not  worrying  about  the  fellow  who  is  a small  pick- 
pocket who  is  trying  to  live  on  the  consumer. 

The  Chairman.  I mean  the  producer.  I am  referring  to  the  small 
producer  who  may  not  be  able  to  place  it  at  their  disposal  on  a com- 
mission. 

Mr.  Free.  Oh,  the  small  producer  would  be  able  to  turn  it  over 
to  them  to  sell  on  commission. 

The  Chairman.  If  such  an  arrangement  could  be  made? 

Mr.  Free.  Yes. 

Mr.  Voigt.  Why  couldn’t  you  people  establish  a warehouse  in 
Washington  and  a warehouse  in  New  York  and  a warehouse  in 
Philadelphia  and  in  other  large  places,  and  sell  your  own  goods  from  , 
there  ? 1 

Mr.  Free.  Well,  now,  that  sounds  fine,  but  let  me  just  illustrate  | 
that  situation  to  you.  I don’t  know  the  whole  number,  but  I know, 
for  instance,  that  in  my  own  county  where  I reside  we  have  34 
different  canneries.  Now,  a man  puts  up  a pack  of,  we  will  say,  ] 
100,000  cases  of  goods.  Now,  he  comes  in  competition  with  every 
other  man  who  is  putting  up  canned  goods.  He  is  going  to  go  to  the  f 
expense  of  establishing  a warehouse  in  Washington  and  another  one  | 
in  New  York.  Here  is  what  we  are  up  against  there.  The  minute 
that  we  try  to  get  together,  our  associations,  your  Federal  Trade 
Commission  comes  down  and  says,  “You  are  a monoply,”  and  they 
file  suit  against  you  to  put  you  out  of  business.  Therefore  we  have 
no  opportunity  to  market  on  a big  system.  Because  it  takes  a tre- 
mendous amount  of  money.  You  take  a cannery  that  would  prob- 
ably spend  a million  or  two  of  dollars  to  put  up  their  pack,  they  can  : 
not  go  out  and  spend  another  hundred  thousand  dollars  to  market  .. 
that  pack. 

Mr.  Voigt.  But  you  have  an  institution  in  California  now  that 
markets  a big  portion  of  your  crop  on  a cooperative  basis. 

Mr.  Free.  But  that  is  in  a limited  way.  That  is  a peculiar  sort 
of  fruit,  and  is  handled  in  a limited  way.  They  practically  control 
the  whole  crop. 

Mr.  Thompson.  What  is  that  that  you  refer  to — the  raisins? 

Mr.  Free.  No;  the  California  Fruit  Exchange  of  southern  Cali- 
fornia. They  handle  the  oranges  of  southern  California. 

Mr.  Thompson.  Don’t  the  raisin  people  in  the  San  Joaquin  Valley 
handle  it  in  that  way  ? 

Mr.  Free.  They  have  no  marketing  system.  They  would  be  up 
against  it  just  as  bad  if  it  were  not  for  the  fact  that  some  fellows  like 
to  make  a little  booze  out  of  the  raisins.  They  happen  to  be  living 


MEAT  PACKER. 


121 


in  clover  at  the  present  time  but  they  haven’t  any  distributing 
system. 

Mr.  Thompson.  They  were  here  for  us  to  appropriate  money  so 
that  they  could  change  the  grape  vines  that  they  had  into  some  other 
kinds  of  grapes.  But  they  have  decided  to  continue,  I guess. 

Mr.  Free.  As  long  as  a man’s  taste  is  what  it  is,  they  will  have  no 
trouble  marketing  that  fruit. 

Mr.  Ten  Eyck.  You  spoke  of  the  cost  to  the  consumer.  Now,  last 
fall  in  New  York  State  a large  percentage  of  our  apples  were  allowed 
to  rot  under  the  trees  on  account  of  the  high  cost  of  labor— and  large 
production,  I suppose,  had  something  to  do  with  it — and  on  account 
of  the  high  cost  of  labor,  large  production,  the  lack  of  a good  market, 
and  the  cost  of  the  container,  which  cost  more  than  we  could  get  for 
the  fruit  that  was  hand-picked— why,  the  fruit  was  allowed  to  rot 
on  the  ground.  Now,  at  that  same  time  I was  paying  20  cents  for 
an  apple  on  the  breakfast  table  in  a hotel  in  New  York,  while  these 
apples  ^were  produced  within  express  distance  of  over  night  to  those 
same  hotels.  Now,  from  that  I deduced  that  our  marketing  system 
and  the  cooperation  between  the  producer  and  the  consumer  were  at 
fault. 

Of  course  this  legislation  that  you  speak  of,  that  may  have  affected 
you,  but  we,  in  New  York,  are  affected  from  an  entirely  different 
cause,  for  an  entirely  different  reason.  Isn’t  that  so,  Mr.  Clarke  ? 

Mr.  Clarke.  Yes,  sir. 

Mr.  Free.  I have  figured  out  the  peach  output  in  the  United 
States,  and  if  you  distributed  those  peaches  throughout  the  country 
there  would  only  be  two  halves  of  a peach  to  each  individual  in  the 
United  States.  It  is  a question  of  putting  them  down  to  the  place 
where  they  would  be  consumed,  and  putting  them  in  the  reach  of  the 
individual  where  he  could  buy.  The  trouble  with  our  system  is  that 
the  channels  are  so  tied  up  that  the  individual  himself  has  got  no  place 
to  buy  in  competition  with  the  little  retailer  who  will  make  perhaps 
10  cents  on  an  apple. 

I have  taken  a good  deal  of  your  time,  and  will  not  take  up  any 
further  time  now.  I thank  you. 

The  Chairman.  Thank  you  very  much. 

Without  objection  the  committee  will  stand  adjourned  until  10 
o’clock  to-morrow  morning. 

(Thereupon,  at  4.40  o’clock  p.  m.,  May  3,  1921,  the  committee 
adjourned  until  10  o’clock  a.  m.,  Wednesday,  May  4,  1921.) 


! 


! 

I 


i 


MEAT  PACKER. 


Committee  on  Agriculture, 

House  of  Representatives, 

Wednesday,  May  J,  1921 . 

The  committee  met  at  10  o’clock  a.  m.,  Hon.  Gilbert  N.  Haugen 
(chairman)  presiding. 

There  were  present:  Mr.  Haugen,  Mr.  Purnell,  Mr.  Voigt,  Mr. 
McLaughlin  of  Nebraska,  Mr.  Tincher,  Mr.  Williams,  Mr.  Sinclair, 
Mr.  Hays,  Mr.  Thompson,  Mr.  Gemerd,  Mr.  Clague,  Mr.  Clarke,  Mr. 
Aswell,  Mr.  Kincheloe,  Mr.  Jones  and  Mr.  Ten  Eyck. 

The  Chairman.  Mr.  Lightfoot,  are  you  ready  to  go  on  this  morning  ? 

Mr.  Lightfoot.  Yes,  sir.  Mr.  Chairman,  there  are  several  of 
the  smaller  packers  present  this  morning  who  desire  to  be  heard. 

The  Chairman.  You  can  control  the  time  and  whatever  you  agree 
upon  is  agreeable  to  the  committee. 

Mr.  Lightfoot.  Mr.  Nash,  the  vice  president  of  the  Institute  of 
American  Meat  Packers,  will  be  heard  first. 

STATEMENT  OF  ME.  S.  T.  NASH,  VICE  PRESIDENT  INSTI- 
TUTE OF  AMERICAN  MEAT  PACKERS  AND  PRESIDENT 

OF  THE  CLEVELAND  PROVISION  CO.,  CLEVELAND,  OHIO. 

Mr.  Nash.  Mr.  Chairman,  my  name  is  S.  T.  Nash,  and  I am  presi- 
dent of  the  Cleveland  Provision  Co.,  a packing  concern  that  has  been 
doing  business  in  Cleveland  for  40  or  50  years,  a so-called  independent 
packer.  The  large  packers  have  no  interest  whatever  in  my  business. 

If  I may,  I would  like  to  give  you  a short  history  of  the  progress 
of  our  business.  We  have  grown  each  year  and  developed  our  sales 
until  last  year  we  had  a business  of  $35,000,000  of  sales. 

We  have  been  in  active  competition  all  the  time  with  all  the  big 
packers,  and  I want  to  say  I have  been  in  the  packing  business  all 
my  life,  and  I believe  there  always  has  been  very  keen  competition 
in  the  packing  business.  We  have  to  sell  our  products  in  the  city 
of  Cleveland  against  about  one  dozen  packers. 

The  fresh-meat  business,  as  you  may  know,  is  a business  where  the 
big  packers  ship  in  their  products  into  all  the  big  centers  in  carload 
lots,  and  it  is  perishable  and  has  to  he  sold,  if  the  weather  is  warm, 
and  it  can  not  be  held,  and  sometimes  there  is  very  keen  competition, 
because  if  they  get  overloaded  and  ship  in  more  stuff  than  the  market 
will  take  or  if  the  weather  gets  bad,  or  something  of  that  sort  happens, 
that  means  a very  low  market. 

There  is  no  opportunity,  and  never  has  been,  in  the  packing  busi- 
ness any  possibility,  either  in  fresh  pork  or  fresh  beef,  to  maintain 
prices,  because  the  product  is  sold*,  according  to  the  condition  it  is 
in,  and  has  to  be  moved  within  a few  days. 


123 


124 


MEAT  PACKER. 


I am  down  here  because  I believe  that  there  has  been  and  always 
has  been,  competition  in  the  packing  business  and  therefore  that  it 
should  not  be  singled  out  in  a special  way  for  special  legislation. 

I think  it  will  be  hampering  to  the  business  and  will  not  accomplish 
the  end  desired. 

Mr.  Williams.  Are  you  opposed  to  any  regulatory  legislation? 

Mr.  Nash.  I am  opposed  to  any  legislation  unless  it  is  general 
legislation  that  takes  in  all  business.  I do  not  believe  in  any  special 
legislation  against  any  special  business  unless  and  until  the  reason 
for  that  legislation  has  been  properly  expressed.  There  is  no  evil 
that  I know  of  in  the  packing  business  that  has  been  definitely 
pointed  out  as  requiring  such  legislation. 

I wanted  to  show  the  development  of  our  business  in  order  to 
show  that  it  is  not  true  that  independent  packers  can  not  prosper; 
that  the  big  fellow  has  been  able  to  destroy  us  all  and  keep  us  down. 
We  have  developed  and  increased  our  business  as  fast  proportionately 
as  almost  any  other  packer. 

Mr.  Clarke.  Do  you  know  of  any  other  instances? 

Mr.  Nash.  Plenty  of  them;  yes,  sir. 

Mr.  Clarke.  Can  you  cite  some  of  them  here? 

Mr.  Nash.  Kingan  & Co.,  a very  large  packing  concern. 

Mr.  Clarke.  Whereabouts  are  they? 

Mr.  Nash.  Indianapolis.  John  Morrill  & Co.,  of  Ottumwa,  Iowa, 
very  large  packers;  Hammond  Standish,  of  Detroit;  Dold,  of  Buffalo; 
and  many,  many  others.  I, 

Mr.  Tincher.  How  many  hundred  independent  packers  have  failed  j 
where  one  has  succeeded  ? 

Mr.  Nash.  There  have  been  a good  many  failures  lately. 

Mr.  Tincher.  I mean  prior  to  this  depression. 

Mr.  Nash.  I should  say  there  have  been  lots  of  them.  I would 
like  to  give  my  idea  of  the  reason  for  those  failures.  I remember  out  j 
in  Iowa  25  or  30  years  ago,  or  35  years  ago,  the  State  was  dotted  with  j 
packing  houses  and  people  w~ent  into  them  as  they  had  been  going  ' 
into  the  business  in  the  last  few  years,  because  they  thought  there  : 
was  a gold  mine  in  it.  There  never  has  been  a gold  mine  in  it.  It  j 
has  always  been  subject  to  a small  margin,  and  unless  efficiently 
managed  and  properly  financed  can  not  succeed.  These  plants  that 
have  failed,  almost  in  every  instance,  are  plants  that  went  out  and 
made  a lot  of  propaganda  about  money  there  is  in  the  packing  busi- 
ness, sold  their  stocks  to  farmers  and  people  around  the  country,  and 
got  insufficient  funds,  so  that  by  the  time  they  got  their  plants  built 
they  had  no  money  left  for  working  capital,  and  that  is  the  main 
reason  why  most  of  those  fellows  have  failed. 

There  are  a half  dozen  in  Iowa  and  many  others  in  the  Northwest 
that  have  failed. 

Mr.  Clarke.  The  proportion  then  is  not  particularly  different  from 
the  proportion  of  failures  in  other  businesses  ? 

Mr.  Nash.  I do  not  know  about  other  businesses,  Mr.  Congressman, 
but  I do  know  that  is  the  reason  for  most  of  the  failures  of  these 
cooperative  and  packing  plants  that  are  started  up  by  people  who 
have  not  got  the  money  or  who  fail  to  get  enough  money. 

I stated  a year  or  two  ago  down  here  that  we  never  looked  back- 
ward in  our  business  after  the  Interstate  Commerce  Commission  was 
created  with  teeth  in  it  to  regulate  rates,  to  take  out  all  discrimina- 


MEAT  PACKER. 


125 


tion  from  transportation,  to  do  away  with  rebates,  special  rates,  mid- 
night rates,  and  things  like  that.  The  Interstate  Commerce  Com- 
mission did  that  and  put  us  and  any  other  independent  operator  on 
an  equality  of  opportunity  of  buying  the  raw  material  and  shipping 
the  processed  product  after  it  was  killed. 

Mr.  Tincher.  You  mean  by  that  it  put  you  in  position  to 

Mr.  Nash.  Equally  - - 

Mr.  Tincher.  So  that  if  there  was  a price  fixed  by  the  five  big 
packers,  that  put  you  in  position  to  get  the  benefit  of  that  price  ? 

Mr.  Nash.  No;  I say  that  put  us  in  position  where  nobody  could 
buy  or  ship  at  less  proportionately  than  we  could.  There  was  a time 
way  back  there  when  the  railroad  rates  were  made  with  regard  to 
volume.  If  a man  offered  100  cars  he  got  a better  rate  than  a man 
offering  2 cars.  The  interstate  commerce  law  stopped  that.  That 
was  the  only  thing  that  we  were  laboring  under,  to  my  mind,  that 
was  unfair  or  where  there  was  any  possibility  of  the  bigger  man 
getting  an  undue  advantage  over  us.  Since  then  I do  not  believe 
there  has  been  any,  except  as  far  as  big  business  with  big  volume  may 
be  able  to  economize  and  do  the  business  cheaper;  but  there  was  no 
fundamental  reason  why  a small  packer  should  not  succeed  as  long 
as  he  could  buy  his  raw  material  at  the  same  price  as  the  other  fellow 
and  ship  it  to  his  plant  at  the  same  rates,  without  any  discrimination, 
and  ship  the  cured  products  out  without  discrimination.  That  is  the 
law  that  made  pur  business,  large  and  small,  and  put  us  on  an  equal 
footing,  to  my  mind. 

Mr.  Williams.  That  law  was  opposed  by  the  railroads  and  the 
interests  very  vigorously  here  in  Congress  for  many  years. 

Mr.  Nash.  I presume  it  was.  Yes;  I believe  it  was,  but  there 
were  certainly  some  definite  evils  that  that  law  proposed  to  cure, 
which  were  rebating,  unfair  making  of  rates,  etc.,  and  many  other 
things  that  were  definitely  stated.  The  purpose  of  that  law  was  well 
known,  and  the  reasons  for  that  law  being  changed  and  being  made 
more  rigid  were  well  known,  and  in  the  case  of  legislation  against  the 
packers,  it  seems  to  me  there  has  been  no  definite  reason  given  as 
to  why  the  packers  should  be  legislated  against,  large  and  small. 

Mr.  Williams.  Do  you  not  think  there  is  a general  sentiment 
throughout  the  country  that  there  are  evils  in  the  packing  industry 
that  should  be  properly  regulated  ? 

Mr.  Nash.  I think  so;  I do  not  think  there  is  any  question  about 
that;  but  I do  not  know  that  they  have  ever  been  proven.  There 
has  been  a lot  of  loose  talk  about  the  evils  in  the  packing  business; 
but  I am  in  the  packing  business  and  I would  like  to  know  whrre 
they  are. 

Mr.  Tincher.  All  right;  maybe  we  can  help  you.  Did  you  know 
that  it  has  been  admitted  and  proven  that  since  there  has  been  no 
legislation  on  this  subject,  the  five  big  packers  have  had  a separate 
corporation  for  the  manipulation  of  their  business  and  that  they  met 
every  morning  ? 

Mr.  Nash.  No,  sir;  I did  not  know  it. 

Mr.  Tincher.  Did  you  know  that  there  had  been  what  was  known 
| as  a legislative  organization  of  the  five  big  packers,  of  which  Mr. 

■ Veeder  was  the  head,  and  the  principal  office  was  at  bis  office  ? 

Mr.  Nash.  No;  I did  not  know  definitely  about  that.  I know  that 
j since  the  big  five  packers  have  been  attacked,  they  naturally  have  to 


126 


MEAT  PACKER. 


fight  back,  and  I should  think  that  their  lawyers  would  be  together 
in  their  attack.  I do  not  know  that  they  are,  but  I should  think 
they  would  be. 

Mr.  Tincher.  You  never  heard  tell  of  such  a thing  as  a corporation 
in  which  the  five  big  packers  were  the  sole  stockholders  ? 

Mr.  Nash.  I did  not. 

Mr.  Tincher.  That  corporation  being  organized  after  the  antitrust 
laws  were  passed  ? 

Mr.  Nash.  No,  sir. 

Mr.  Tincher.  And  having  a place  where  the  big  five  packers  met 
every  morning,  through  their  representatives,  to  decide  on  the  policy 
of  business  for  that  corporation  for  the  day  ? 

Mr.  Nash.  No,  sir. 

Mr.  Tincher.  Did  you  know  that  there  was  a claim  made  by  an 
arm  of  this  Government  that  for  the  protection  of  themselves,  as  you 
call  it,  or  for  lobbying  purposes  and  so  on,  they  had  levied  as  high  as 
$50,000  assessments  on  one  another  and  paid  them  through  one  law 
office  in  Chicago,  and  had  kept  no  record  of  those  transactions  ? 

Mr.  Nash.  If  I know  anything  about  it  it  is  from  reading  the 
Federal  Trade  Commission  report. 

Mr.  Tincher.  Did  you  read  that  report  ? 

Mr.  Nash.  Yes,  sir;  I read  that  report. 

Mr.  Tincher.  While  that  is  a report  of  a department  of  this  Gov- 
ernment, not  saying  that  absolutely  all  of  it  is  true,  yet  there  are  a 
great  many  things  in  the  Federal  Trade  Commission  report  that  Mr. 
Veeder  and  the  distinguished  gentlemen  representing  the  packers  j 
have  admitted  here  in  the  committee  hearings  as  being  true.  Do 
you  know  what  part  of  the  Federal  Trade  Commission's  report  is 
admitted  to  be  true  and  the  part  of  it  that  is  denied  by  the  packers  ? 

Mr.  Nash.  No,  sir;  I do  not. 

Mr.  Tincher.  Well,  having  read  the  Federal  Trade  Commission  ; 
report,  knowing  the  charges  therein  contained  and  not  knowing  the  $ 
portion  of  that  report  which  is  denied  by  the  packers,  how  can  you  l 
conscientiously  say  to  a legislative  committee  that  no  legislation  on 
this  subject  would  be  to  the  best  interests  of  this  country? 

Mr.  Nash.  I know  there  are  a whole  lot  of  things  in  that  Federal  ; 
Trade  Commission  report  that  I know  are  not  true.  I think  a report 
that  is  so  full  of  inaccuracies  is  not  a very  dependable  report. 

Mr.  Tincher.  I will  ask  you  to  state  one  thing  that  is  in  the  Fed- 
eral Trade  Commission  report  that  you  know  is  not  true. 

Mr.  Nash.  All  right;  I will  do  that. 

Mr.  Tincher.  And  I will  say  to  you  that  when  you  do  that,  you 
will  be  more  specific  and  definite  than  any  other  packer  I have  ever 
heard  testify. 

Mr.  Nash.  All  right.  In  that  Federal  Trade  Commission  report — 
and  it  is  some  time  since  I read  it — it  is  stated  that  Morris  & Co.,  in  a 
certain  year  made  700  per  cent  profit.  That  is  one  report  in  the 
Federal  Trade  Commission  report  that  is  not  true. 

Mr.  Tincher.  You  say  that  that  is  in  the  Federal  Trade  Commis- 
sion report  that  you  read  ? 

Mr.  Nash.  Yes,  sir. 

Mr.  Tincher.  You  do  not  know  what  volume  it  is  in  or  anything 
like  that? 

Mr.  Nash.  No;  I do  not. 


MEAT  PACKER. 


127 


Mr.  Tincher.  Now,  you  know  that  is  not  true  ? 

Mr.  Nash.  I know  that  is  not  true. 

Mr.  Tincher.  How? 

Mr.  Nash.  By  the  official,  annual  reports,  sworn  to  and  issued  by 
Morris  & Co.,  as  to  their  profits. 

Mr.  Tincher.  You  mean  you  have  read  a report  of  Morris  & Co., 
which  says  it  is  not  true  ? 

Mr.  Nash.  No;  I have  read  their  annual  statement. 

Mr.  Tincher.  Let  us  see  about  that.  You  have  read  a report  of 
the  Federal  Trade  Commission  claiming  that  in  a certain  year  Morris 
& Co.  made  so  much  money  on  their  original  investment  or  their 
capital  stock. 

Mr.  Nash.  No;  it  said  they  made  700  per  cent  profit.  That  is 
what  it  said. 

Mr.  Williams.  On  what  ? 

Mr.  Nash.  That  was  the  trouble. 

Mr.  Williams.  Did  it  not  say  on  what? 

Mr.  Nash.  No;  it  did  not  say. 

Mr.  Williams.  You  do  not  deny  then  that  they  might  have  made 
700  per  cent  on  something? 

Mr.  Nash.  They  might  have  made  700  per  cent  on  something. 

Mr.  Williams.  Then  you  can  not  say  the  report  is  not  true. 

Mr.  Nash.  Well,  anyway,  it  is  a very  misleading  report;  you  would 
admit  that,  wouldn’t  you? 

Mr.  Clarke.  Was  not  the  idea  you  had  in  mind  that  an  ordinary 
person  would  deduct  from  that  statement  the  inference  that  they 
made  700  per  cent  on  their  capital  stock? 

Mr.  Nash.  And  surplus.  That  is  what  the  natural  assumption 
would  be  by  people 

Mr.  Tincher  (interposing) . What  per  cent  did  they  make  ? 

Mr.  Nash.  I think  they  made  about  7 or  8 or  10  per  cent  on  their 
capital  and  surplus. 

Mr.  Tincher.  Now,  do  you  want  to  say  to  this  committee,  for  the 
purpose  of  influencing  us  on  legislation,  that  we  should  or  should  not 
pass;  that  7 or  8 or  10  per  cent  is  a proper  amount  to  figure  on  Morris 
& Co.’s  business  instead  of  700  per  cent? 

Mr.  Nash.  Yes,  sir;  I would  like  to  say  that. 

Mr.  Tincher.  Now,  it  would  make  some  little  difference  to  the 
committee  in  considering  this  matter  whether  it  was  700  per  cent 
or  7 or  8 per  cent  or  150  per  cent  or  200  per  cent.  Now,  what  was 
the  real  profit,  since  you  know  about  this  thing  ? 

Mr.  Nash.  The  profit  on  their  capital  and  surplus  was  something 
less  than  10  per  cent. 

Mr.  Tincher.  Suppose  they  have  admitted  it  was  150  per  cent 
and  declared  a dividend  or  stock  dividend  to  that  amount,  would 
your  testimony  be  very  valuable  to  this  committee  ? 

Mr.  Nash.  I should  say  no.  If  it  was  dealing  with  the  same  year 
it  would  be  worthless. 

Mr.  Tincher.  All  we  can  go  by  is  the  testimony  that  we  hear  up 
here,  the  facts  we  are  able  to  get  from  the  records  and  from  the 
witnesses  who  appear  before  us. 

Mr.  Nash.  Now,  let  us  talk  about  profits  a little  bit,  anyway.  If 
you  are  going  to  estimate  profits  on  surplus  and  money  invested,  I 


128  MEAT  PACKER. 

will  venture  to  say  that  no  packer  has  ever  made  150  per  cent  in  any 
year,  or  ever  will. 

Mr.  Tincher.  If  you  have  made  an  investigation  such  as  would 
make  your  venture  of  value  to  the  committee  that  would  be  very 
valuable  testimony,  but  we  are  supposed  to  have  people  here  who 
have  made  an  investigation  and  who  give  us  actual  figures  to  go  on. 
Now,  you  say  those  figures  are  inaccurate,  and  in  fairness  to  the 
committee  you  ought  to  give  us  some  actual  figures  to  go  on  in  order 
to  dispute  those  actual  figures. 

Mr.  Nash.  I think  I should.  I think  I can  give  them  to  you. 

Mr.  Tincher.  Suppose  the  five  big  packers  maintain  an  organiza- 
tion, since  there  has  been  no  legislation,  to  employ  lobbyists  and  pay 
their  unaudited  expenses;  that  they  maintain  an  organization,  of 
which  no  record  is  kept  but  in  which  they  levy  assessments  on  each 
other  amounting  to  as  much  as  150,000  to  influence  legislation;  that 
they  maintain  an  organization  to  elect  candidates  who  would  wink 
at  violations  of  law  and  defraud  those  pledged  to  fair  enforcement; 
suppose  they  maintain  an  organization  to  control  tax  officials  and 
evade  just  taxation;  to  secure  modification  of  Government  rules  and 
regulations  by  devious  and  improper  methods,  to  bu^  up  public 
opinion  by  the  control  of  editorial  policy  through  advertising,  loans, 
and  subsidies;  and  by  the  publication  and  distribution  at  large  ex- 
pense of  false  and  misleading  statements.  If  that  condition  exists, 
and  has  existed,  since  there  has  been  no  legislation  on  this  subject, 
do  you  think  this  is  a subject  that  the  American  Congress  could  , 
afford  to  take  notice  of  and  pass  some  Federal  legislation  that  would  « 
obviate  those  troubles  ? 

Mr.  Nash.  This  legislation  that  is  here  proposed  is  legislation 
affecting  the  entire  packing  industry.  I am  representing  myself,  not 
the  big  packers.  I am  an  independent  packer,  and  if  any  crime  has  j 
been  committed  by  the  big  packers  I shoul  . thin'v  they  are  subject  { 
to  punishment  by  laws  already  on  the  statute  books. 

Mr.  Tincher.  You  think  there  is  plenty  of  law  now  ? 

Mr.  Nash.  I do,  sir. 

Mr.  Tincher.  What  laws  ? | 

Mr.  Nash.  The  antitrust  laws. 

Mr.  Tincher.  Which  one  ? 

Mr.  Nash.  The  Hepburn. 

Mr.  Tincher.  The  Hepburn  antitrust  law  you  think  would  reach 
the  situation  ? 

Mr.  Nash.  And  the  Clayton  antitrust  law.  I think  the  laws  we 
have  got  are  ample  to  take  care  of  any  violation  of  law  or  unfair 
practices,  or  the  things  that  the  big  packers,  particularly,  have  been 
accused  of.  The  small  packers  have  never  been  accused  of  anything 
that  I know  of. 

Mr.  Tincher.  Suppose  the  packers  had  been  guilty  of  the  things 
that  are  charged  by  the  Federal  Trade  Commission  that  I have  read 
to  you,  and  none  of  them  has  ever  been  in  jail,  do  you  think  we  have 
sufficient  laws  for  the  governing  of  this  question  ? 

Mr.  Nash.  I doubt  if  any  other  law  is  going  to  put  them  in  jail. 

Mr.  Clague.  A lot  of  us  ought  to  be  in  jail,  maybe. 

Mr.  Clarke.  I think  the  Department  of  Justice  ought  to  be  in-  1 
vestigated,  if  you  get  right  down  to  it,  Mr.  Tincher,  if  that  is  true. 


MEAT  PACKER. 


129 


Mr.  Tincher.  Here  is  a bold  statement  made  by  the  Federal 
Trade  Commission’s  report,  which  you  have  read  and  are  familiar 
with: 

Henry  Veeder,  the  manager  of  the  Veeder  pools  in  the  nineties,  is  the  assessor,  col- 
lector, and  paymaster  of  these  joint  funds,  and  his  office  is  the  clearing  house  through 
which  the  money  passes  and  to  which  reports  are  sent.  Although  single  assessments 
for  these  funds  range  as  high  as  $50,000,  Veeder  claims  he  keeps  no  hooks  showing  the 
disposition  of  these  large  sums  of  money,  but  the  many  letters  now  in  our  possession 
show  specifically  to  whom  a part  of  the  money  was  paid  and  for  what  purpose. 

Have  you  run  down  that  clause  in  the  Federal  Trade  Commission’s 
findings  ? 

Mr.  Nash.  No,  sir;  I have  not. 

Mr.  Tincher.  You  do  not  know  who  they  spent  that  money  with? 

Mr.  Nash.  I do  not. 

Mr.  Tincher.  You  do  not  know  of  any  public  officials  that  were 
retained  ? 

Mr.  Nash.  I do  not. 

Mr.  Tincher.  By  a portion  of  that  money  ? 

Mr.  Nash.  No,  sir. 

Mr.  Tincher.  Do  you  not  think  that  some  enlightenment  on  that 
subject  might  influence  your  testimony  before  this  committee  as  to 
whether  we  should  pass  any  legislation  or  not  ? 

Mr.  Nash.  No;  I do  not  think  it  would. 

Mr.  Tincher.  It  would  not  make  any  difference  about  the  truth  or 
falsity  of  that  statement,  and  that  would  not  influence  you  one  way 
or  the  other. 

Mr.  Nash.  I do  not  think  that  would  determine  whether  legislation 
was  necessary  or  wise  that  was  to  affect  a whole  industry,  simply 
because  one  or  two  or  three  persons  in  that  industry  may  be  accused 
of  doing  wrong. 

Mr.  Tincher.  Now,  the  reason  you  are  not  complaining  of  the  con- 
dition is  that  there  is  no  control  that  prevents  you  from  buying 
cheap  enough  and  selling  high  enough,  is  not  that  it  ? 

Mr.  Nash.  I did  not  get  that. 

Mr.  Tincher.  The  reason  you  are  not  complaining  of  any  evils  that 
exist  in  this  business,  or  of  any  monopolistic  control  that  the  Big 
Five  packers  exercise  over  the  business,  is  that  if  there  is  such  a thing 
it  does  not  influence  or  keep  you  from  buying  cheap  enough  and  selling 
high  enough. 

Mr.  Nash.  I do  not  believe  there  is  any  monopolistic  control  in  our 
business. 

Mr.  Tincher.  But  if  there  is,  and  you  apparently  are  not  the  final 
judge  of  that,  it  does  not  keep  you  from  buying  as  cheap  as  they  do  or 
from  buying  cheap  enough  and  selling  high  enough. 

Mr.  Nash.  No. 

Mr.  Tincher.  Now,  do  you  realize,  sir,  that  there  is  a large  per- 
centage of  the  population  of  this  great  country  of  ours  who  are  not 
in  your  identical  position  in  reference  to  this  matter  ? 

Mr.  Nash.  I certainly  do. 

Mr.  Tincher.  And  that  one  large  percentage  of  them  are  trying 
to  produce  for  the  other  per  cent  and  the  consuming  public  might 
not  look  at  this  through  exactly  the  same  lenses  that  you  do  ? 

46985—21 9 


130 


MEAT  PACKER. 


Mr.  Nash.  I know,  of  course,  that  they  do  not.  I know  that 
neither  the  producer  nor  the  consumer  has  looked  at  it  the  same  as 
we  do. 

Mr.  Tincher.  As  I understand  you,  you  claim  that  if  they  are 
guilty  of  all  these  things,  still  we  do  not  need  any  laws,  because  we 
have  sufficient  laws  on  the  subject. 

Mr.  Nash.  I did  not  understand  that  this  argument  was  to  be 
confined  to  the  sins  of  the  big  five  packers.  I thought  this  was 
legislation  dealing  with  the  entire  packing  industry,  to  which  I belong. 

Mr.  Tincher.  Suppose  the  big  five  packers  control  a sufficient 
amount  of  the  products  to  absolutely  make  it  possible,  and  that  they 
do  actually,  fix  the  price  you  pay  the  producers;  and,  of  course,  you 
buy  as  cheaply  as  you  can  and  do  not  pay  him  any  more  than  you 
have  to,  and  practically  fix  the  price  at  which  you  sell  to  the  man 
who  sells  to  the  consumer — suppose  that  condition  actually  ex- 
ists— 

Mr.  Nash.  I do  not  think  it  does  exist. 

Mr.  Tincher.  If  it  does  exist,  and  we  destroy  that  control,  that 
would  affect  you  to  some  extent  you  think?  In  other  words,  you 
are  'profiting  by  that  control,  you  think  ? 

Mr.  Nash.  You  mean  under  the  present  law? 

Mr.  Tincher.  Yes. 

Mr.  Nash.  If  it  exists,  I do  not  think  we  are  at  all. 

Mr.  Tincher.  Then,  if  you  are  not,  the  legislation,  if  it  exists,  will 
not  affect  you  or  hurt  you. 

Mr.  Nash.  If  legislation  is  just  piling  on  expenses  to  a business,  I 
think  such  legislation  is  wrong  in  a competitive,  commercial  business. 

I do  not  see  why  one  industry  should  be  picked  upon.  If  there  are 
any  sins  in  that  industry,  let  us  put  our  fingers  on  that  situation.  If 
the  Big  Five  packers  are  such  criminals,  I think  with  all  the  laws  in 
this  country  we  ought  to  have  been  able  to  put  them  in  jail  before  ; 
this.  Now,  we  have  not. 

Mr.  Tincher.  The  railroads  were  of  such  a public  nature  and  of  ) 
such  magnitude,  and  the  carrier  proposition  was  of  such  magnitude,  ; 
that  it  became  necessary  for  the  Government  to  step  in  to  afford  a j 
brotherhood  for  man  and  to  protect  you  from  the  big  packer. 

Mr.  Nash.  Yes;  that  is  right. 

Mr.  Tincher.  Now,  then,  if  the  big  packer  is  to  be  compared  with 
the  railroads  as  to  magnitude  and  size,  and  if  the  public  needs  that 
protection,  is  it  not  just  as  worthy  for  the  Federal  Government  to 
step  in  and  protect  the  general  public  as  it  was  to  protect  you  in 
assuming  control  of  the  private  railroads  ? 

Mr.  Nash.  Yes;  but  the  private  railroads  are  also  a public  utility. 

Mr.  Tincher.  Do  you  not  consider  that  if  the  big  packer  do 
control  the  food  products  of  this  country  and  the  price  of  them  that 
that  is  of  a public  nature  as  much  as 

Mr.  Nash.  Yes;  of  a public  nature,  but  that  should  not  necessarily 
subject  them  to  any  hampering  control. 

Mr.  Tincher.  Now,  as  I understand  you,  you  think  that  the 
common  carrier  that  carries  a man  from  one  station  to  another  or 
that  carries  produce  from  one  station  to  another  is  of  such  a public 
nature  that  the  Government  must  look  after  it,  but  the  handling  of 
food  products  that  every  man,  woman,  and  child  in  the  United 
States  are  interested  in,  is  not  of  such  a public  nature  that  the 


MI- AT  PACKER. 


131 


American  Congress  should  give  any  heed  to  it  even  though  it  is 
controlled  by  a monopolistic  control. 

Mr.  Nash.  But  it  is  not. 

Mr.  Tincher.  There  is  some  difference  of  opinion  between  you 
and  a great  many  good  people;  but  suppose  it  was,  would  you  be 
in  favor  then  of  the  Federal  Government 

Mr.  Nash  (interposing).  Yes,  sir;  if  there  was  monopolistic  con- 
trol I would  be  in  favor  of  such  action  restricting  that  control. 

Mr.  Tincher.  Then  if  there  is  serious  question  before  Congress 
as  to  whether  there  is  a monopolistic  control  and  if  the  great  weight 
of  the  evidence  is  that  there  is,  what  would  be  Congress’s  duty  in 
that  regard  ? 

Mr.  "Nash.  That  is  up  to  Congress.  If  the  evidence  in  their 
opinion  is  that  there  is  that  monopolistic  control,  I think  Congress 
ought  to  enact  some  sort  of  legislation. 

Mr.  Tincher.  I just  wondered  what  your  views  were. 

Mr.  Williams.  Have  you  read  the  various  bills  pending  before 
the  committee  ? 

Mr.  Nash.  Yes,  sir. 

Mr.  Williams.  What  do  you  object  to  in  those  bills  as  affecting 
you,  as  an  independent  packer  ? 

Mr.  Nash.  Well,  I object  to  what  I call  the  confiscation  of  our 
stock  yards  stock.  The  Big  Five  packers  have  agreed  by  this  con- 
sent decree  to  give  up  their  stockyards  stock  within  two  years. 
Both  of  these  bills,  the  Haugen  bill  and  the  other  bill,  take  away 
from  all  packers  their  stockyards  stock  or  any  interest  in  stock- 
yards.  I think  that  is  confiscatory  because  the  very  fact  that  you 
are  compelled  to  sell  your  stock  depreciates  its  value  at  once,  because 
the  packer  is  a help  to  stockyards.  He  is  the  man  who  buys  the 
stuff  there  and  if  he  is  friendly  to  it  and  favors  it,  the  stockyards 
is  in  better  shape.  If  the  stock  is  all  to  be  taken  away  from  them, 
the  very  fact  that  people  generally  who  might  buy  stockyards 
stock  would  know  they  have  to  sell  would  make  the  value  of  that 
stock  less,  would  it  not  ? 

Mr.  Williams.  Is  your  company  financially  interested  in  stock- 
yards  ? 

Mr.  Nash.  Yes;  in  the  Cleveland  yards.  We  own  about  15 
per  cent. 

Mr.  Tincher.  Who  owns  the  rest  of  the  yards  ? 

Mr.  Nash.  Swift  & Co.  did  own  10  per  cent.  The  balance  is 
scattered  among  about  400  stockholders. 

Mr.  Tincher.  Who  controls  the  stockyards  or  who  has  had 
control  ? 

Mr.  Nash.  I think  there  is  a man  down  in  Louisville  and  certain 
interests  in  Buffalo,  neither  of  them  packing  interests,  that  would 
control  them.  They  are  the  Largest  stockholders  by  far. 

Mr.  Clarke.  You  say  your  stockholders  list  is  over  400? 

Mr.  Nash.  Yes,  sir;  I think  so. 

Mr.  Clarke.  How  was  that  stock  distributed  ? 

Mr.  Nash.  It  is  an  old  company  and  the  stock  has  been  acquired. 

Mr.  Clarke.  And  held  in  certain  families  foi*  some  time? 

Mr.  Nash.  Yes;  it  is  held  by  some  estates.  A lot  of  them  are 
small  stockholders. 


132 


MEAT  PACKER. 


Mr.  Jones.  Did  this  man  who  owned  the  controlling  stock  have 
an  interest  in  any  packing  concern  ? 

Mr.  Nash.  No;  he  does  not  own  control  himself,  but  he  and 
another  one  or  two,  I think,  would  control  them. 

Mr.  Jones.  And  they  have  no  stock  in  any  packing  company? 

Mr.  Nash.  No;  none  at  all. 

Mr.  Ten  Eyck.  Do  they  hold  that  as  an  investment?  Is  that 
stock  a good  investment  ? 

Mr.  Nash.  Yes;  they  have  been  in  the  stockyards  business  all  their 
lives  and  built  it  up. 

Mr.  McLaughlin  of  Nebraska.  With  reference  to  that  section  of 
the  bill  to  which  you  object,  have  you  noticed  in  reading  all  the  bills 
that  deal  with  that  subject  that  there  was  a specified  time  given  in 
which  the  packers  may  divorce  themselves  from  their  stockyards 
holdings,  and  further,  that  the  Secretary  of  Agriculture  or  the  com- 
mission, whichever  it  may  be  as  provided  in  the  bills,  may  in  their 
discretion  extend  the  time? 

Mr.  Nash.  Yes. 

Mr.  McLaughlin  of  Nebraska.  Indefinitely. 

Mr.  Nash.  I do  not  know  about  indefinitely. 

Mr.  McLaughlin  of  Nebraska.  Yes. 

Mr.  Nash.  There  is  not  much  sense,  it  seems  to  me,  in  telling  a man 
to  sell  his  stock  and  then  saying  that  it  may  be  held  indefinitely. 

Mr.  McLaughlin  of  Nebraska.  Yes;  they  may  extend  the  time  in 
their  discretion,  if  they  find  there  are  no  discriminatory  practices  or 
that  there  is  not  sufficient  reason  for  requiring  them  to  divorce  them- 
selves of  their  stockyards  holdings. 

Mr.  Nash.  No;  my  understanding  was  it  was  a decree  to  divorce 
themselves  at  some  time  from  their  interests.  I did  not  know  that  it 
was  proposed  that  they  would  be  allowed  to  eventually  retain  them. 

Mr.  McLaughlin  of  Nebraska.  I think  you  will  find  that  the  pro- 
visions of  the  bill  require  nothing  further  than  already  agreed  to  by 
the  packers  in  the  consent  decree. 

Mr.  Nash.  Well,  I am  speaking  as  an  independent  packer.  We 
were  not  in  the  consent  decree,  we  did  not  come  in. 

Mr.  McLaughlin  of  Nebraska.  I understand. 

Mr.  Nash.  The  independent  packers  were  not  compelled  to  get  rid 
of  their  stockyard  stuff;  that  was  just  for  the  five  big  packers. 

Mr.  McLaughlin  of  Nebraska.  In  answer  to  Congressman 
Tincher's  question,  you  said  that  there  was  one  place  where  the  Federal 
Trade  Commission  was  inaccurate  in  its  statement,  and  you  said  that 
in  some  certain  year  they  made  the  statement  that  the  profits  of 
Morris  & Co.  were  700  per  cent.  I find  in  part  5 of  the  Federal  Trade 
Commission's  report,  dealing  with  the  subject  of  profits  of  the 
packers,  on  page  41,  these  words: 

No  figures  are  presented  showing  the  rate  of  profit  on  investment  defined  as  “ capital 
stock  outstanding,  ’ ’ as  this  gives  in  cases  a misleading  view  as  to  the  reasonableness  of 
the  return.  Such  a rate  would  mean  very  little  in  the  case  of  the  packers,  because  of 
the  varying  policies  which  the  several  companies  have  pursued  in  respect  to  issuing 
stock  dividends.  Morris  & Co.,  whose  surplus  is  now  some  14  times  greater  than  its 
capital  stock,  would  show  an  enormous  rate,  while  Armour  & Co.,  which  has  capitalized 
surplus  to  a large  extent,  would  show  a much  lower  rate — -thus  the  earnings  of  the  two 
companies,  based  on  net  worth  or  on  total  investment,  were  not  very  dissimilar. 

In  table  11  on  page  42,  “ Rate  of  ‘ earnings'  of  the  five  great  packers 
on  total  investment,"  I find  for  the  six  years  from  1912  to  1917,  the 


MEAT  PACKER. 


133 


percentages  of  profit  per  year,  and  that  the  average  for  Morris  & Co. 
was  9.2  per  cent. 

As  I remember  in  reading  the  report  of  the  Federal  Trade  Commis- 
sion there  was  no  other  definite  figure  stated  as  to  the  profit  of  Morris 
& Co.  It  seems  to  me  that  you  owe  it  to  the  committee  to  find  that 
place  and  put  it  in  the  record  — that  is,  where  there  is  the  statement 
made  of  700  per  cent. 

Mr.  Nash.  Certainly;  if  I am  wrong,  I will  admit  it.  I had  a dis- 
tinct understanding  when  Mr.  Tincher  asked  me  to  give  that.  I 
know  that  I have  seen  it  published,  may  be  in  a newspaper  report  of 
the  Federal  Trade  Commission  report  estimating  what  that  would  be, 
but  I know  that  I saw  it  blazonly  across  our  paper  that  the  Federal 
Trade  Commission  claims  Morris  & Co.  made  700  per  cent.  My 
memory  may  have  failed;  it  has  been  two  or  three  years  ago,  or  quite 
a little  while  ago  since  I read  it,  and  I may  be  wrong,  but  it  is  full  of 
inaccuracies.  It  is  rather  difficult  to  ask  me  right  now  to  point  that 
out. 

Mr.  McLaughlin  of  Nebraska.  Well,  inasmuch  as  you  have  made 
the  statement,  you  should  point  out  to  us,  before  you  leave  this 
hearing,  some  definite  inaccuracies  ? 

Mr.  Nash.  All  right;  I think  I ought  to  do  that. 

Mr.  McLaughlin  of  Nebraska.  If  you  are  in  a position  to  look  up 
the  facts. 

Mr.  Nash.  I will  be  glad  to  do  that;  all  right. 

Mr.  Williams.  If  Congress  should  enact  legislation,  leaving  the 
ownership  of  the  stockyards  as  they  are  now 

Mr.  Nash  (interposing).  Yes,  sir. 

Mr.  Williams  (continuing).  But  regulating  them  in  some  way, 
placing  them  in  the  hands  of  the  Federal  Tr£de  Commission,  would 
you  have  any  serious  objection  to  that  kind  of  legislation,  provided 
it  was  reasonable  ? 

Mr.  Nash.  No. 

Mr.  Williams.  You  would  not? 

Mr.  Nash.  No.  I object  to  legislation  if  it  means  an  increased  cost 
of  government.  Where  we  have  other  commissions  or  existing  boards 
that  can  do  that,  I object  to  the  introduction  of  other  commissions. 
We  have  the  Interstate  Commerce  Commission  and  other  commissions, 
and  I do  not  see  any  sense  in  having  further  commissions. 

Mr.  Ten  Eyck.  Would  it  not  be  beneficial  if  some  sort  of  regula- 
tion, either  by  State  or  Government,  similar  to  that  which  is  at  South 
St.  Paul,  could  be  had? 

Mr.  Nash.  I do  not  know  what  the  regulation  is  at  South  St.  Paul. 

Mr.  Ten  Eyck.  They  claim  under  those  regulations  of  the  State, 
I understand,  that  the  South  St.  Paul  stockyards  have  gone  from 
fifth  place  of  business  in  the  country  to  fourth  place. 

Mr.  Nash.  Yes,  sir. 

Mr.  Ten  Eyck.  Because  the  producer  feels  assured  that  he  is  going 
to  get  a square  deal. 

There  is  one  other  thing  that  I wish  to  ask  you  in  relation  to  the 
control  of  the  stockyards.  The  control  of  the  stockyards  does  not 
! amount  to  very  much  unless  they  use  it  to  elect  directors.  Are  the 
I directors  of  the  stockyards  representatives  of  the  packers  and  do  they 
control  the  board  ? 

Mr.  Nash.  In  our  stockyards  ? 


134 


MEAT  PACK  El E 


Mr.  Ten  Eyck.  Yes,  sir. 

Mr.  Nash.  No;  they  do  not.  My  brother  is  a director,  and  there 
is  one  other  packer  represented  on  the  board,  and  I think  the  board 
is  composed  of  9 or  11,  and  there  are  2 packer  representatives  on  the 
entire  board. 

Mr.  Ten  Eyck.  Are  the  other  directors  directly  or  indirectly 
connected  with  the  so-called  trust  ? 

Mr.  Nash.  No,  sir.  You  mean  by  “the  so-called  trust”  the 
Packer  Trust  ? 

Mr.  Ten  Eyck.  Yes,  sir. 

Mr.  Nash.  I do  not  know.  I do  not  belong  to  the  so-called  packer 
trust;  I am  an  independent  packer. 

Mr.  Ten  Eyck.  I am  not  talking  about  your  brother. 

Mr.  Nash.  He  is  a director. 

Mr.  Ten  Eyck.  I am  talking  of  the  majority. 

Mr.  Nash.  I am  talking  of  the  Cleveland  stockyards  where  our 
plant  is. 

Mr.  Ten  Eyck.  I am  talking  about  the  board  of  directors. 

Mr.  Nash.  Of  the  stockyards? 

Mr.  Ten  Eyck.  Yes,  sir. 

Mr.  Nash.  There  are  two  representatives  of  the  packers  on  our 
stockyards. 

The  Chairman.  How  many  in  all? 

Mr.  Nash.  I am  not  sure  whether  it  is  9 or  11 ; it  is  9,  anyway. 

Mr.  Clarke.  Would  you  say  that  it  might  be  considered  a neces-  * 
sary  adjunct  of  the  railroads  to  take  over  the  stockyards  the  same 
as  it  has  its  freight  yards,  terminals,  etc.  ? 

Mr.  Nash.  Well,  we  went  through  that  in  our  business  many 
years  ago  and  we  used  to  consider  that  the  railroads  owning  the  j 
stockyards  was  a distinct  menace  to  us  as  independent  operators. 

Mr.  Clarke.  Why? 

Mr.  Nash.  Because,  at  least  in  those  days  when  they  owned  them,  | 
they  had  the  power  to  give  special  service  and  sometimes  special  ; 
rates  to  the  yards  they  owned  in  discrimination  against  the  non- 
railroad  stockyards,  which  was  a very  unfair  proposition.  In  the  ! 
old  days  Buffalo  had  railroad-owned  yards. 

Mr.  Clarke.  Would  not  that  control  come  now  within  the  purview 
of  the  Interstate  Commerce  Commission? 

Mr.  Nash.  Well,  it  would  if  it  was  specially  arranged.  I do  not 
know  what  control  the  Interstate  Commerce  Commission  could  have 
over  stockyards,  because 

Mr.  Clarke  (interposing) . As  a part  of  the  transportation  system. 

Mr.  Nash.  It  could  not  have  any  control  over  that  part  of  the 
stockyards  business  that  was  intrastate,  could  they  ? 

Mr.  Clarke.  Probably  not. 

Mr.  Nash.  Take  many  of  our  yards  which  are  located  in  the  center 
of  the  State,  almost  the  entire  business  originates  within  that  State. 

Mr.  Jones.  I was  not  here  when  you  started,  Mr.  Nash,  and  if  this 
matter  has  been  gone  over  I will  not  go  into  it.  Does  your  concern 
own  any  private  refrigerator  cars  ? 

Mr.  Nash.  Yes,  sir;  we  do. 

Mr.  Jones.  How  many  do  you  own? 

Mr.  Nash.  We  own  about  175. 

Mr.  Jones.  Do  you  use  what  they  call  the  “tramp  car?” 


MEAT  PACKER. 


135 


Mr.  Nash.  Do  you  mean  the  peddler  car  ? 

Mr.  Jones.  Yes,  sir. 

Mr.  Nash.  Yes,  sir. 

Mr.  Jones.  Do  you  use  that  rather  extensively  ? 

Mr.  Nash.  No;  we  probably  have  15  or  20  a week  going  out. 

Mr.  Jones.  Does  your  concern  own  your  peddler  cars  ? 

Mr.  Nash.  We  own  them;  we  own  all  our  cars,  we  use  our  own  cars. 

Mr.  Jones.  Not  only  the  refrigerator  car,  but  the  peddler  car  as 
well  ? 

Mr.  Nash.  Yes,  sir;  the  peddler  car  is  a refrigerator  car. 

Mr.  Jones.  What  products,  other  than  meat,  do  you  handle 
through  the  peddler  car? 

Mr.  Nash.  Very  little;  it  is  negligible.  We  do  a little  business  in 
cheese,  a little  bit  in  butter  and  eggs,  but  the  total  value  of  our  busi- 
ness, outside  of  the  direct  packing  business,  is  practically  nothing. 

Mr.  Jones.  In  the  handling  of  these  private  refrigerator  cars  do 
you  get  special  service  from  the  railroad  companies  ? 

Mr.  Nash.  No,  sir. 

Mr.  Jones.  Is  there  any  preference  given  in  the  shipment  over 
ordinary  freight  ? 

Mr.  Nash.  I do  not  know  about  ordinary  freight.  As  to  whether 
perishable  products  are  given  in  some  cases  better  service  than  the 
slow-moving  nonperishable  freight,  I think  probably  they  are. 

Mr.  Ten  Eyck.  That  is  to  say,  perishable  freight  is  given  prefer- 
ence over  ordinary  freight  ? 

Mr.  Nash.  Yes,  sir;  I think  it  is. 

Mr.  Jones.  Your  private  refrigerator  cars  would  have  special 
service  over  ordinary  freight  ? 

Mr.  Nash.  Over  such  ordinary  freight  as  lumber  and  nonperishable 
things,  because  the  railroads  are  of  necessity  bound  to  move  the 
perishable  a little  more  quickly. 

Mr.  Jones.  When  you  put  nonrelated  products  in,  do  they  do  that  ? 

Mr.  Nash.  We  do  not. 

Mr.  Jones.  In  these  cars  they  would  have  a preference  shipment 
over  what  they  would  have  if  they  did  not  go  in  refrigrator  cars  ? 

Mr.  Nash.  If  we  deal  in  what  you  call  unrelated  products,  which 
are  as  highly  perishable  as  meat,  butter,  and  eggs  we  have  only  some 
small  business  in,  I may  just  as  well  say  we  are  straight  packers,  we 
have  no  unrelated  products. 

Mr.  Jones.  There  were  a lot  of  things  that  the  packers  put  in  their 
refrigerator  cars,  prior  to  the  entry  of  this  consent  decree,  that  were 
not  perishable  products  ? 

Mr.  Nash.  Yes. 

Mr.  Jones.  So  far  as  they  put  those  in  the  refrigerator  cars  it  gave 
them  a preference  shipment  over  ordinary  freight  and  they  had  a 
preference  shipment  on  those  articles  ? 

Mr.  Nash.  It  might  be  that  they  had.  I should  think,  however, 
that  a man  competing  with  a packer,  who  is  a wholesale  grocer, 
shipping  in  carload  lots,  his  products  would  get  the  same  service. 

Mr.  Jones.  If  he  had  the  use  of  the  refrigerator  cars,  but  if  he  were 
dealing  exclusively  in  these  unrelated  products  and  did  not  handle 
meats  then  he  could  not  get  the  preference  shipments  ? 


136 


MEAT  PACKER. 


Mr.  Nash.  If  he  does  not  need  the  refrigerator  cars  for  his  products, 
he  does  not  have  to  get  them. 

Mr.  Jones.  I understand  that  perfectly,  but  suppose  a man  has  a 
lot  of  refrigerator  cars  and  he  uses  half  of  those  cars  for  refrigeration 
and  the  other  half  for  articles  that  do  not  require  refrigeration,  does 
not  he  get  an  advantage,  in  actual  competition,  over  the  man  who 
does  not  have  the  cars  ? 

Mr.  Nash.  In  what  way? 

Mr.  Jones.  He  gets  a preference  shipment,  he  can  deliver  to  the 
retailer  at  an  earlier  day  ? 

Mr.  Nash.  Those  things  are  all  carried  in  stock,  as  a rule. 

Mr.  Jones.  I understand,  but  he  can  deliver  more  quickly? 

Mr.  Nash.  Not  if  he  delivers  out  of  the  stock. 

Mr.  Jones.  For  instance,  I have  observed  in  my  section  of  the 
country  that  the  local  merchant  will  turn  the  wholesale  grocery 
drummer  down  on  orders  because,  he  will  say,  “I  can  order  from 
Swift  & Co.  and  get  it  down  here  to-morrow  morning,  whereas  if  I 
order  it  from  you  it  will  take  two  or  three  days  or  a week,  they  have 
special  service  cars.” 

Mr.  Nash.  Not  arguing  the  question  as  to  the  advantage  of  the 
packers,  they  had  something  which  they  have  given  up. 

Mr.  Jones.  They  are  asking  that  that  agreement  be  done  away 
with,  or  some  one  was  speaking  of  it — I do  not  know  whether  it  was 
the  packers. 

Mr.  Nash.  They  have  agreed  to  give  up  unrelated  goods.  They 
are  not  dealing  with  them,  but  the  only  advantage  I can  see  that  the 
packer  ever  had,  and  I think  it  is  a sound  economic  advantage, 
which  he  never  should  have  given  up — never  should  have  given  up — 
that  is  the  right  to  deal  in  any  legitimate  business  with  his  own  money, 
that  is  a sound  economic  proposition 

Mr.  Jones  (interposing) . I do  not  know  but  you  are  right  on  that. 
If  you  are  going  to  let  him  engage  in  this  business,  ought  not  he  to 
be  depiived  of  the  special  advantage  of  handling  these  other  related 
or  unrelated  products,  if  they  do  not  require  private  refrigerator  cars  ? 

Mr.  Nash.  It  is  a big  nuisance  to  own  refrigerator  cars.  We  have 
two  or  three  hundred  thousand  dollars  invested.  I am  willing  that 
the  railroads  or  the  Government  should  take  all  refrigerator  cars, 
provided  they  will  always  supply  us  with  good  refrigerator  cars  when 
needed.  The  reason  we  bought  these  cars  was  not  that  we  wanted 
to  tie  up  our  money  in  railroad  equipment,  but  because  we  could  not 
get  cars  when  we  wanted  them.  The  railroads  had  no  money  to 
buy  them  and  would  not  build  them.  That  is  the  reason  we  got 
into  the  car  business.  I presume  that  is  the  reason  all  the  other 
packers  got  into  the  private  car  business.  Our  car  business  has 
never  shown  much  of  a profit,  over  6 or  7 per  cent  when  new,  and 
now  that  they  are  old,  what  you  get  back  does  not  pay. 

Mr.  Jones.  Do  you  not  think  if  they  are  permitted  to  have  the 
private  refrigerator  cars  they  should  be  limited  in  the  use  of  them  to 
only  those  products  that  require  refrigeration? 

Mr.  Nash.  They  are  now;  they  have  given  up  the  unrelated 
products. 

Mr.  Jones.  Possibly  some  of  the  unrelated  products  to  not  require 
refrigeration  ? 


MEAT  PACKER. 


187 


Mr.  Nash.  Certainly.  They  do  not  ship  goods  that  do  not  require 
refrigeration  in  refrigerator  cars;  it  is  too  expensive. 

Mr.  Jones.  Everything  of  the  animal  that  is  manufactured  into 
something  requires  refrigeration? 

Mr.  Nash.  No;  fertilizer  does  not. 

Mr.  Jones.  There  are,  in  fact,  a great  many  things  manufactured 
from  some  part  of  the  animal  which  do  not  require  refrigeration? 

Mr.  Nash.  Fertilizer,  blood,  and  hair,  none  of  which  is  sold  through 
their  branch  houses. 

Mr.  Jones.  Do  you  mean  to  say  that  none  of  the  big  packers  sell 
any  article  under  the  consent  decree  now  that  does  not  require 
refrigeration  ? 

Mr.  Nash.  I say  there  are  a whole  lot  of  things  that  require 
refrigeration.  Fertilizer,  hair,  dried  blood,  none  of  those  things 
requires  refrigeration. 

Mr.  Jones.  Are  there  not  a lot  of  others  that  you  have  not 
enumerated? 

Mt.  Nash.  Perhaps  there  are.  Of  course,  there  is  the  hide  of  the 
steer  that  does  not  require  refrigeration. 

Mr.  Jones.  There  are  a lot  of  these  products  of  parts  of  the  animal 
that  go  into  manufacture  of  products.  You  do  not  think  the  out- 
siders should  be  deprived  of  the  privilege  of  engaging  in  this  business, 
the  people  outside  of  the  packers  ? 

Mr.  Nash.  I do  not  know  that  I just  understand  that  question. 

Mr.  Jones.  You  say  that  you  think  the  packers  should  be  per- 
mitted to  put  their  money  into  anything  they  desire  ? 

Mr.  Nash.  Certainly. 

Mr.  Jones.  Do  you  think  that  outside  people  should  be  permitted 
to  put  their  money  where  they  want  to,  on  the  same  basis  ? 

Mr.  Nash.  Absolutely;  everybody. 

Mr.  Jones.  Here  are  a lot  of  products  that  these  packers  sell  that 
do  not  require  refrigeration  ? 

Mr.  Nash.  Yes,  sir. 

Mr.  Jones.  Do  you  not  believe  that  the  packers,  if  they  are  per- 
mitted to  have  the  private  cars,  should  be  permitted  to  use  those  private 
cars,  which  are  alleged  as  necessary,  for  the  shipment  of  articles  that 
do  not  require  refrigeration  ? 

Mr.  Nash.  I certainly  do. 

Mr.  Jones.  You  think  they  should  be  permitted  to  use  the  cars 
for  the  distribution  of  products  that  do  not  require  refrigeration  ? 

Mr.  Nash.  Yes,  sir;  but  I do  not  think  it  is  done. 

Mr.  Jones.  Does  not  that  give  them  a special  service,  an  unfair 
advantage  over  the  man  whose  products  do  not  require  refrigeration  ? 

Mr.  Nash.  No,  sir. 

Mr.  Jones.  I do  not  see  how  you  figure  it. 

Mr.  Nash.  If  they  ship  cheap  goods  like  hides  or  fertilizer  in  a 
refrigerator  car  they  add  to  the  product’s  cost.  They  could  ship  that 
out  cheaper  in  another  car,  because  there  are  not  enough  refrigerator 
cars  to  go  around.  It  is  inconceivable  that  any  man  owning  a 
refrigerator  car  costing  $2,500  or  $3,000  possibly,  would  ship  hides 
in  it. 

Mr.  Jones.  I did  not  say  anything  about  shipping  hides. 

Mr.  Nash.  No;  you  did  not;  but  I was  speaking  of  goods  that  do 
not  require  refrigeration. 


138 


MEAT  PACKER. 


Mr.  Ten  Eyck.  What  Mr.  Jones  means  is  that  when  a packer  uses 
half  of  his  own  cars  marked  11  refrigerator  car”  for  products  that  do 
not  require  refrigeration,  the  very  fact  that  the  car  is  not  a railroad 
car  with  that  mark  on  it  will  give  it  special  treatment,  because  it  is 
understood  that  there  are  perishable  goods  in  the  car  ? 

Mr.  As  well.  They  have  to  pay  a higher  price. 

Mr.  Ten  Eyck.  I was  coming  to  that.  To  obtain  the  use  of  a 
refrigerator  car  for  nonperishable  goods,  costs  him  more;  it  costs 
more  than  the  ordinary  car. 

Mr.  Nash.  To  the  railroads  ? 

Mr.  Ten  Eyck.  Yes,  sir.  It  costs  more  to  use  that  car? 

Mr.  Nash.  Yes,  sir;  it  certainly  costs  you  more  to  use  it,  because 
you  need  it  for  some  perishable  goods. 

Mr.  Ten  Eyck.  That  is  not  the  question. 

Mr.  Nash.  That  is  the  fact. 

Mr.  Ten  Eyck.  The  question  is  this:  Should  not  the  railroads  be 
required  to  give  everyone  else  the  same  service  that  they  give  you  ? 

Mr.  Nash.  Why,  as  an  academic  question,  I think  that  the  railroads 
should  give  everybody  the  same  service;  yes,  sir. 

Mr.  Ten  Eyck.  I think  they  try  to  and  they  want  to,  but  the  very 
fact  that  you  use  a character  of  car  which  is  advertised  on  the  side 
as  a refrigerator  car  makes  every  yardmaster  and  every  trainmaster 
move  that  car  faster  ? 

Mr.  Nash.  I do  not  know. 

Mr.  Ten  Eyck.  Which  they  should  do. 

Mr.  Nash.  It  might  have  that  effect,  and  probably  has  had  it. 
Certainly  I know  that  the  beef  trains  from  the  West  to  the  East  are 
moved  faster,  and  if  that  were  not  so  nobody  could  do  business  in 
fresh  beef  in  the  East.  That  is  for  the  economical  good  of  the  whole 
country. 

Mr.  Ten  Eyck.  That  is  right. 

The  other  point  that  Mr.  Jones  brought  up  was  that  perhaps  the 
big  packers  are  getting  some  advantage  in  shipping  other  than  per- 
ishable products  ? 

Mr.  Nash.  The  refrigerator  car  may  have  some  advantage,  I do 
not  know,  but  I can  not  conceive  that  there  would  be  any  advantage 
accruing  to  the  packer  from  using  refrigerator  cars  to  ship  some  non- 
perishable  commodity.  There  might  be  a way  that  he  could  get  it 
down  to  a certain  point  in  a day  or  two  less,  but  I can  not  conceive 
of  it  being  of  much  benefit  to  the  packer  on  the  theory  that  the  re- 
frigerator car  provides  quicker  service  so  that  the  packer  would  get 
some  unusual  benefit  from  shipping  nonperishable  goods  in  that  car. 

Mr.  Voigt.  Suppose  the  packers  put  a carload  of  a hundred  differ- 
ent commodities  into  a refrigerator  car,  they  can  stop  the  refrigerator 
car  at  every  station  along  a certain  line  and  they  can  go  to  any  retail 
butcher  or  grocery  man  in  that  town  and  find  out  what  he  wants  and 
make  delivery  immediately  out  of  that  car.  Then  they  can  close  up 
their  car  and  go  to  the  next  town  and  repeat  the  operation? 

Mr.  Nash.  Yes,  sir. 

Mr.  Voigt.  Do  you  see  how  any  wholesale  dealer  in  those  com- 
modities can  compete  with  the  packer  ? 

Mr.  Nash.  Of  course,  we  are  speaking  about  something  which  the 
consent  decree  has  determined  shall  not  go  on;  in  fact,  it  does  not 
exist. 


MEAT  PACKER. 


139 


Mr.  Voigt.  This  committee  may  interfere  with  the  consent  decree. 

Mr.  Nash.  I will  be  glad  to  give  you  my  idea  on  that. 

Mr.  Voigt.  You  said  that  you  could  see  no  advantage  that  the 
packers  had  in  that. 

Mr.  Nash.  He  could  not  have  an  advantage. 

Mr.  Voigt.  The  question  is,  shall  not  we  exclude  that  and  put 
them  back  in  the  position  they  were  in  before  there  was  a consent 
decree  ? 

Mr.  Nash.  I am  not  familiar  with  the  grocery  articles  that  the 
packers  handled,  except  the  assertion  that  you  had  here  in  Wash- 
ington, that  the  total  grocery  business  of  the  five  big  packers  com- 
bined was  less  than  5 per  cent  of  the  total  grocery  business  of  the 
United  States,  not  over.  That  came  out  in  the  hearings.  I think 
that  the  packer,  through  his  hundreds  of  branch  houses,  conveniently 
located,  has  an  advantage  over  anybody  else  dealing  in  the  same  sort 
of  articles;  I do  believe  that.  I think  it  was  a sound  economic  ad- 
vantage that  was  of  benefit  to  the  country,  and  to  the  consumer. 
He  has  given  it  up. 

Mr.  Aswell.  I should  like  to  ask  this  question:  If  the  packer 
shipped  unrelated  products  in  a refrigerator  car  along  with  the  beef, 
did  not  he  pay  a higher  freight  rate  than  on  the  ordinary  shipment 
in  ordinary  freight  cars  ? 

Mr.  Nash.  I do  not  know.  I am  not  sure  what  the  freight  rates 
were. 

Mr.  Creigh.  Under  the  1.  c.  1.  freight  rate,  ordinary  less-than- 
carload  shipments,  the  packer’s  shipment  would  go  through  the  rail- 
road freight  house.  The  railroad  itself  and  the  freight  house  would 
have  to  handle  it  and  unload  it,  mix  it  up  with  the  other,  and  have 
all  the  difficulty  of  doing  that,  billing  it,  everything  to  get  it  into 
a car. 

The  packers  under  the  tariffs,  which  are  applicable  to  everybody, 
shippers  of  groceries,  everyone,  on  the  old  basis  when  they  had  articles, 
groceries,  we  will  say,  put  the  groceries  in  their  own  refrigerator  car. 
The  packer  did  all  the  work  of  loading  it,  it  did  not  add  to  the  con- 
gestion in  the  freight  house,  it  took  the  stuff  out  of  the  freight  house 
and  there  was  a large  saving  of  expense  to  the  railroads.  The 
packer  did  the  work  and  paid  the  higher  freight  rate. 

Mr.  Ten  Eyck.  What  they  call  broken  carload  lots  ? 

Mr.  Creigii.  Absolutely. 

If  I might  put  in  one  other  thing,  as  I have  watched  the  little 
debate  here,  I think  that  a couple  of  the  Congressmen  figure  that  this 
peddler  car- proposition  is  dependent  on  it  being  a private  car.  There 
is  no  such  thing  as  that.  The  private  car  has  nothing 

Mr.  Jones  (interposing).  I understood  that  your  company  owned 
its  cars  ? 

Mr.  Creigh.  Yes,  sir;  but  the  jobber,  who  does  not  own  the  car 
at  all,  has  stuff  going  in  a refrigerator  car  and  he  works  just  exactly 
the  same  system,  under  the  very  same  tariff. 

Mr.  Jones.  Then  why  do  you  have  private  cars  ? If  the  other  man 
can  get  them,  can  not  you  get  them  ? 

Mr.  Creigh.  The  other  man  needs,  possibly,  a car  a month,  and 
Mr.  Nash  is  in  a business  where  he  needs  a definite  supply  of  about 
50  cars  a week.  It  is  the  difference  between  a person  doing  a carload 
business  and  a person  who  does  an  1.  c.  1.  business,  drop  shipments 


140 


MEAT  PACKER. 


along  the  line.  The  minute  he  gets  the  tonnage  up  to  the  point 
where  he  can  use  peddler  car  tonnage,  say,  15,000  pounds,  he  can 
get  the  same  service.  The  tariff  is  there  for  everybody.  The  private 
ownership  of  a car  has  no  advantage  under  that  tariff.  Take  my  case, 
Cudahy,  the  ownership  of  the  cars  does  not  cut  any  figure.  We 
own  our  own  cars,  but  we  must  ship  the  same  way. 

Mr.  Jones.  Does  your  company  practice  the  putting  of  nonperish- 
able products  in  with  perishable  products  in  a shipment  ? 

Mr.  Creigh.  To  a limited  degree.  As  Mr.  Nash  has  said,  the  case 
is  so  exceptional  that  it  does  not  bear  on  it.  For  instance,  we  have 
a car  at  the  packing  house  that  is  going  down  the  road,  we  will  say, 
with  some  nonperishable  stuff  which  we  want  to  move.  When  we 
put  it  in  the  car,  after  hauling  it  to  the  car,  we  pay  the  same  rate 
as  if  we  put  it  on  a truck  and  carried  it  to  the  freight  house  and  let 
them  load  it  into  an  1.  c.  1.  car  with  somebody  else’s  goods. 

Mr.  Jones.  I understand,  but  it  does  give  you  a quicker  shipment 
and  it  makes  the  local  dealer  who  wants  to  purchase  through  that 
process,  not,  perhaps,  because  of  the  less  price,  but  because  of  the 
quicker  service  than  the  other  man  who  does  not  own  his  car. 

Mr.  Creigh.  Let  us  put  it  in  two  ways.  In  the  first  place,  we  are 
able  to  make  more  frequent  deliveries.  Is  there  economical  or  public 
disadvantage  to  that? 

Mr.  Jones.  No.  As  I understand  by  owning  your  private  cars  it 
enables  you  to  give  them  quicker  service  ? 

Mr.  Creigh.  The  ownership  of  the  private  car,  I have  been  trying 
to  tell  you,  has  no  relation  to  the  question  that  we  are  talking  about. 
I am  trying  to  tell  you  that  the  private  car  business  has  no  connection 
with  the  railroad  practice  or  tariff. 

Mr.  Jones.  But  does  not  the  fact  that  you  own  a lot  of  these 
refrigerator  cars  make  it  so  that  the  railroads  do  not  use  efforts  to 
supjny  the  cars  for  the  other  people  ? 

Mr.  Creigh.  Well,  now,  as  you  say,  the  man  has  not  a very  great 
need  if  that  is  the  case. 

Mr.  Jones.  But  isn’t  it  in  its  concentrated  form  a very  great  ad- 
vantage for  the  whole  business  ? 

Mr.  Creigh.  If  the  need  is  not  very  great  then  the  other  is  not  very 
great. 

Mr.  Jones.  The  advantage  might  be  very  great  because  you  use 
them  to  get  preferred  shipments. 

Mr.  Creigh.  Well,  but  we  do  not. 

Mr.  Jones.  That  is  the  point  in  the  statement  of  the  Federal  Trade 
Commission.  They  charge  that  this  gives  expedited  service.  For 
instance,  on  page  59  of  the  report  of  the  Federal  Trade  Commission 
on  private  car  lines,  dated  June  27,  1919,  they  state: 

They  give  expedited  service  to  groceries,  cheese,  lard,  glue,  soap,  soap  powder,  and 
other  products,  and  in  times  of  embargoes  against  such  articles,  enable  the  packer  to 
get  his  shipment  through  to  market. 

It  is  stated  that  these  articles  could  just  as  well  be  shipped  in 
ordinary  box  cars  instead  of  in  refrigerator  cars.  But  I do  not  know 
about  the  situation,  but  am  seeking  information. 

Mr.  Creigh.  This  is  a tremendously  complicated  proposition  and  a 
highly  important  proposition.  It  is  all  related  to  the  transportation 
end  of  the  business,  which  is  at  this  time  entirely  within  the  jurisdic- 


MEAT  PACKER. 


141 


tion  of  the  Interstate  Commerce  Commission.  Mr.  Crafts  happens 
to  be  here  and  is  one  of  the  packer  attorneys  in  the  grocery  end  of  the 
business,  and  he  knows  about  the  whole  thing.  The  whole  thing  will 
work  out  under  the  proceedings  now  pending. 

Mr.  Jones.  I do  not  know  whether  a court  decree  will  be  what  the 
public  will  want  or  not.  The  public  may  want  you  people  to  do 
something  else. 

Mr.  Creigh.  I have  not  suggested  the  decree.  I say  there  is  a pro- 
ceeding pending  before  the  Interstate  Commerce  Commission,  which 
has  control  of  tariffs.  The  grocers  have  made  complaint  along  this 
line,  that  there  is  a preferential  service.  That  commission  is  con- 
sidering the  matter.  Months  have  been  taken  in  getting  evidence 
and  arguments  have  been  had,  and  all  that  is  now  thoroughly  covered 
by  law  and  subject  to  consideration  in  the  pending  case,  and  has  no 
relation  to  the  decree  at  all. 

Mr.  Ten  Eyck.  But  you  people  do  give  the  public  better  service 
through  the  use  of  your  cars,  which  facilitates  shipments  and  shortens 
the  time  between  shipment  and  delivery,  and  you  are  thereby  render- 
ing the  public  a service,  are  you  not  ? 

Mr.  Creigh.  I think  so. 

Mr.  Ten  Eyck.  But  it  seems  to  me  that  if  the  other  fellow  by  ina- 
bility to  obtain  cars,  and  I do  not  say  that  he  can  obtain  them,  but 
if  there  is  inability  to  obtain  cars  to  compete  with  you  it  would  be  a 
good  thing  either  for  this  committee  or  for  the  Interstate  Commerce 
Commission  to  make  rules  and  regulations,  and  even  go  so  far  as  to 
force  the  railroads  to  build  more  cars  to  give  them  the  same  service 
you  yourselves  enjoy.  You  would  be  in  favor  of  that,  wouldn’t  you  ? 

Mr.  Creigh.  Yes. 

Mr.  Ten  Eyck.  Are  you  in  favor  of  giving  the  other  fellow  the 
same  opportunities  and  use  of  cars  that  you  have  ? 

Mr.  Creigh.  Oh,  we  would  be  in  favor  of  everybody  having  a 
proper  service.  But  I do  not  want  you  to  infer  from  that  statement 
that  I mean  there  is  anything  wrong  with  the  present  system. 

Mr.  Ten  Eyck.  No.  But  if  we  should  come  to  the  conclusion  that 
there  may  be  some  discrimination  in  that  matter  it  would  be  proper 
legislation  to  insist  upon  the  railroads  giving  your  competitors  full 
opportunity  to  get  cars  as  easily  as  you  can  get  your  own  cars, 
wouldn’t  it  ? 

Mr.  Creigh.  Isn’t  that  the  law  now? 

Mr.  Kincheloe.  Wouldn’t  it  be  a better  order  of  procedure  to  hear 
one  gentleman  at  a time  ? Mr.  Nash  is  now  on  the  stand,  and  I think 
he  should  be  permitted  to  finish  his  statement. 

The  Chairman.  Yes;  that  is  the  better  form  of  procedure. 

Mr.  Ten  Eyck.  First  I would  like  to  have  an  answer  to  my 
question. 

Mr.  Creigh.  First,  it  is  the  law  now,  and  certainly  it  is  the  desire 
of  the  packers  that  that  should  be  the  system.  But  if  you  will  par- 
don me  for  one  sentence,  I do  not  think  anything  better  illustrates  the 
difficulty  of  the  trade  proposition  than  the  paragraph  read  by  Mr. 
Jones.  The  point  is  made  that  in  times  of  congestion  the  packer  will 
have  an  advantage  through  putting  this  stuff  into  his  car.  If  the 
packer  is  going  to  do  any  considerable  volume  of  business  and  if  he 
can  not  use  his  own  car  then  he  is  going  to  turn  his  stuff  into  the 


142 


MEAT  PACK  EE. 


freight  houses  and  thereby  add  to  the  very  congestion  that  is  at 
times  complained  of.  If  you  will  consider  the  point  on  its  merits 
you  will  find  that  the  packers  use  their  own  cars  as  a means  of  econ- 
omy to  the  railroads,  and  that  such  use  is  beneficial  to  the  public 
and  that  it  relieves  congestion  at  terminals,  which  is  highly  beneficial 
to  the  jobbers,  his  competitors.  I think  therefore  it  is  shown  that 
the  packers  are  rendering  a service  by  using  their  own  cars. 

Mr.  Ten  Eyck.  It  is  my  idea  not  to  take  away  from  the  packer 
the  service  he  has,  but  to  give  to  his  competitor  an  equal  service. 

Mr.  Creigh.  Well,  I wish  you  would  look  at  the  subject  from  the 
standpoint  of  the  packers,  that  this  is  an  increase  in  efficiency,  which 
is  their  motto. 

Mr.  Aswell.  Suppose  I am  a retail  grocery  merchant  in  my  district 
and  my  customers  need  urgently  and  immediately  a shipment  of 
canned  fruits,  we  will  say,  Under  the  statement  made  the  packer 
could  get  it  down  to  me  in  a day  or  two,  and  as  to  the  ordinary  whole- 
saler in  less-than- carload  lots  it  would  take  a week  or  two. 

Mr.  Jones.  It  would  take  a week  or  two  in  carload  lots  outside  of 
the  use  of  the  packers’  own  cars. 

Mr.  Aswell.  All  right;  in  the  interest  of  my  customers,  which  is 
the  better,  to  let  the  packers  send  the  goods  on  promptly  or  to  let 
the  law  prohibit  their  use  of  these  cars  and  let  my  customers  wait  ? 

Mr.  Jones.  For  that  particular  shipment  of  course  it  would  be 
better  to  let  the  packer  ship  the  goods,  but  that  tendency  if  carried 
on  to  the  logical  conclusion  would  put  the  handling  of  all  food  prod- 
ucts in  the  hands  of  the  packers.  I am  merely  giving  you  the  con- 
tention of  the  wholesale  grocers  on  this  subject. 

Mr.  Aswell.  Why  can  not  the  wholesale  grocer  do  the  same  things 
get  a refrigerator  car  and  send  the  goods  down  there  ? 

Mr.  Jones.  Perhaps  he  can  not  own  a refrigerator  car. 

Mr.  Aswell.  Well,  he  does  not  have  to  own  them. 

Mr.  Jones.  He  has  to  own  cars  in  order  to  get  them  promptly. 
Frequently  they  are  not  able  to  get  such  cars  promptly  when  they 
do  not  themselves  own  them.  And  further,  he  would  not  have  uso 
for  a refrigerator  car  but  only  for  an  ordinary  car. 

Mr.  Aswell.  If  he  can  not  get  such  a car  when  he  needs  it  where 
is  the  Interstate  Commerce  Commission?  If  he  can  not  get  them 
then  they  are  not  in  existence,  and  something  should  be  done  to 
provide  them. 

Mr.  Jones.  Perhaps  the  demand  would  not  be  for  products  requir- 
ing the  use  of  a refrigerator  car,  and  all  other  business  would  have 
to  wait  until  this  refrigerator  car  of  the  packer  was  hauled  down  the 
line. 

Mr.  Aswell.  But  must  my  customers  wait  and  starve  for  10  or  15 
days  ? 

Mr.  Jones.  I may  be  down  there  in  another  line  of  business  and 
want  my  stuff  just  as  much  as  the  local  grocer  would  want  his  supply, 
but  in  that  case  my  cars  would  have  to  stand  on  the  sidetrack  and 
wait  for  the  packers’  refrigerator  cars  to  go  through. 

Mr.  Kincheloe.  Don’t  you  think  you  gentlemen  could  settle  that, 
controversy  in  executive  session  ? 

Mr.  Aswell.  I was  seeking  information. 


MEAT  PACKER. 


143 


Mr.  Clarke.  I think  Mr.  A swell’s  question  was  seeking  informa- 
tion, and  was  a practical  question,  but  I rather  think  Mr.  Jones’s 
argument  was  theoretical. 

Mr.  Jones.  Well,  I think  as  all  these  witnesses  are  here  we  o’lght 
to  bring  out  all  of  the  light  we  can  on  the  subject. 

Mr.  Kincheloe.  Oh,  I think  we  ought  to  get  this  evidence  from 
the  witnesses  and  not  from  the  members  of  the  committee.  We  can 
discuss  it  as  members  of  the  committee  when  we  go  into  executive 
session  to  consider  the  bill. 

Mr.  Jones.  Well,  that  is  all  right. 

Mr.  Kincheloe.  I would  like  to  ask  you  a few  questions:  As  one 
member  of  this  committee  I want  to  get  the  facts  and  later  to  draw 
my  own  conclusions.  So  far  as  I have  followed  your  testimony  here 
I think  you  are  longer  on  opinions  than  you  are  on  facts.  If  I under- 
stand you,  you  are  an  independent  packer  located  at  Cleveland. 

Mr.  Nash.  Yes,  sir;  at  Cleveland,  Ohio. 

Mr.  Kincheloe.  Your  exclusive  time  is  taken  up  in  the  operation 
and  manipulation  of  your  plant  ? 

Mr.  Nash.  Yes,  sir;  I would  say  in  the  handling  of  our  business. 

Mr.  Kincheloe.  I meant  in  the  prosecution  of  that  business. 

Mr.  Nash.  Yes,  sir. 

Mr.  Kincheloe.  Have  you  any  connection,  either  directly  or  indi- 
rectly, with  the  so-called  Big  Five  packers  ? 

Mr.  Nash.  No,  sir. 

Mr.  Kincheloe.  Do  you  know  anything  personally  about  their 
business  ? 

Mr.  Nash.  Only  in  a general  way. 

Mr.  Kincheloe.  You  know  from  experience  in  a general  way,  but 
you  are  not  actively  connected  with  them  in  business  ? 

Mr.  Nash.  I meet  them  in  competition  day  after  day. 

Mr.  Kincheloe.  You  said  when  you  first  began  your  statement 
that  there  was  no  effort  to  control  prices  by  the  Big  Five  packers,  and 
that  prices  were  not  controlled  in  any  way,  and  therefore  that  no 
legislation  of  any  kind  is  necessary  to  control  any  part  of  the  business 
of  these  packers  ? 

Mr.  Nash.  Of  the  packing  industry,  I said. 

Mr.  Kincheloe.  How  do  you  know  that  there  is  no  collusion  of 
any  kind  in  the  control  of  prices  of  products  that  the  Big  Five  packers 
handle  ? 

Mr.  Nash.  I do  not  know.  But  I do  know  that  there  is  competition 
in  the  business.  What  they  may  do  now  or  may  have  been  doing  I 
do  not  know  in  detail. 

Mr.  Kincheloe.  Not  knowing  anything  about  that  personally 
you  are  not  in  a position  to  make  a definite  statement  on  that  point. 

Mr.  Nash.  I only  know  what  has  been  said. 

Mr.  Kincheloe.  I am  dealing  in  facts  and  not  in  theory  or  in  gen- 
eral statements.  I merely  want  to  know  what  you  know.  You  said 
you  had  read  the  report  of  the  Federal  Trade  Commission? 

Mr.  Nash.  Yes,  sir. 

Mr.  Kincheloe.  You  said  a while  ago  that  they  did  not  give  the 
facts  in  their  report  ? 

Mr.  Nash.  I said  there  were  lots  of  inaccuracies  in  their  report. 

Mr.  Kincheloe.  Especially  as  pertained  to  the  Morris  people. 
You  said  they  stated  at  one  place  that  they  had  made  700  per  cent, 


144 


MEAT  PACKER. 


but  that  you  did  not  know  whether  you  saw  that  in  the  report  of 
the  Federal  Trade  Commission  or  in  some  wild  newspaper  article. 

Mr.  Nash.  I do  not  recall  just  where  I saw  it. 

Mr.  Kincheloe.  You  do  not  know  anything  about  the  operation 
of  the  stockyards  in  South  St.  Paul,  do  you  ? 

Mr.  Nash.  No,  sir;  not  very  much.  I buy  there  occasionally. 

Mr.  Kincheloe.  You  have  not  had  all  of  your  transactions  at  the 
South  St.  Paul  stockyards  ? 

Mr.  Nash.  No,  sir. 

Mr.  Kincheloe.  You  say  there  is  competition  among  the  five  big 

E ackers.  Mr.  Wells,  who  was  here  the  other  day  and  who  is  employed 
y the  State  of  Minnesota  and  has  no  connection  with  any  kind  of 
packing  business,  being  supervisor  of  the  public  stockyards  there,  says 
there  is  absolutely  no  competiiton  in  the  buying  of  hogs  in  those 
yards,  and  never  has  been  since  he  has  been  there.  You  do  not  know 
about  that  ? 

Mr.  Nash.  Know  about  what  yard  ? 

Mr.  Kincheloe.  The  South  St.  Paul  stockyards. 

Mr.  Nash.  I have  bought  hogs  there  in  competition  with  the  big 
packers  and  in  competition  with  everybody  else  buying  on  those 
yards. 

Mr.  Kincheloe.  But  you  do  not  undertake  to  say  from  your 
indefinite  knowledge  of  the  transactions  which  occur  on  the  South 
St.  Paul  stockyards  that  there  is  competition  in  buying? 

Mr.  Nash.  I do  not  know  anything  about  the  competition  except 
as  I buy  there. 

Mr.  Kincheloe.  Mr.  Wells  further  said  that  when  Mr.  Hormel,  • 
an  independent  buyer,  came  there,  and  every  time  he  came  there  and 
bought  hogs,  the  price  of  hogs  went  up.  He  says  it  is  a common 
occurrence  that  whenever  Mr.  Hormel  is  there  he  knew  it  by  looking 
over  the  books,  and  the  remark  will  often  be  made,  “Mr.  Hormel  has  i 
been  here  to-day,  ” by  reason  of  the  fact  that  the  the  price  of  hogs  had  j 
increased.  Do  you  know  anything  about  that  ? 

Mr.  Nash.  I do  not  know  about  that. 

Mr.  Kincheloe.  You  do  not  know  about  that  at  all? 

Mr.  Nash.  I know  about  other  yards  more  than  I do  the  South 
St.  Paul  stockyards. 

Mr.  Kincheloe.  What  other  yards  do  you  know  about  except 
your  own  ? 

Mr.  Nash.  Chicago,  Indianapolis,  Kansas  City,  St.  Louis. 

Mr.  Kincheloe.  Do  you  buy  on  those  yards  ? 

Mr.  Nash.  Yes,  sir. 

Mr.  Kincheloe.  Do  you  know  what  happens  there  except  when 
you  do  buy  ? 

Mr.  Nash.  We  buy  there  very  frequently. 

Mr.  Kincheloe.  Except  when  you  are  buying  you  do  not  know 
what  happens  there  ? 

Mr.  Nash.  Yes,  sir;  we  have  a man  at  Indianapolis,  and  we  have  a 
buyer  at  Chicago,  and  he  is  thoroughly  familiar  with  market  condi- 
tions in  all  those  markets. 

Mr.  Kincheloe.  I am  not  talking  about  general  market  conditions 
but  the  alleged  condition  of  setting  the  market  price. 

Mr.  Nash.  I do  not  believe  it  exists.  I am  in  the  Indianapolis 
market  almost  every  day  buying  hogs. 


MEAT  PACKER. 


145 


Mr.  Kinciieloe.  I am  not  so  much  interested  in  your  opinion  as  I 
am  in  the  facts.  I am  after  facts. 

Mr.  Nash.  And  I am  giving  you  facts,  the  conditions  as  I know 
them.  When  I buy  hogs  there  my  opmion  is  certainly  worth  more 
than  the  opinion  of  the  fellow  who  does  not  buy  hogs  there. 

Mr.  Kincheloe.  Certainly. 

Mr.  Nash.  This  fellow  does  not  buy  hogs. 

Mr.  Kincheloe.  Mr.  Wells  is  at  the  South  St.  Paul  stockyards  in 
the  employ  of  the  State  of  Minnesota,  and  he  says  there  is 
absolutely  no  competition  there. 

Mr.  Nash.  He  is  not  a hog  buyer. 

Mr.  Kincheloe.  He  is  there  as  supervisor  of  the  yards  and  knows 
what  they  are  doing. 

Mr-.  Nash.  Certainly,  so  far  as  his  observation  informs  him. 

Mr.  Kincheloe.  And  if  he  makes  these  statements  that  there  is 
absolutely  no  competition  there,  and  that  every  time  Mr.  Hormel 
comes  there  and  buys  hogs  the  price  is  raised,  you  do  not  dispute 
those  statements  ? 

Mr.  Nash.  No,  sir;  because  I do  not  know  anything  about  the 
conditions  there. 

Mr.  Aswell.  Why  isn’t  there  competition  at  the  South  St.  Paul 
stockyards  if  Hormel  comes  there  and  his  buying  raises  the  price  ? 

Mr.  Kincheloe.  When  he  comes  there  he  raises  the  price  and 
that  makes  competition.  Mr.  Nash,  you  know  nothing  about  Mr. 
Wells’s  statement? 

Mr.  Nash.  No,  sir. 

Mr.  Clague.  Suppose  you  ask  Mr.  Nash  how  it  is  on  the  days 
when  he  buys  hogs  ? 

Mr.  Kincheloe.  Suppose  you  answer  that  question? 

Mr.  Nash.  I do  not  raise  the  price  unless  I try  to  buy  all  of  the 
hogs  on  the  market. 

Mr.  Clague.  I do  not  mean  on  that  particular  day,  but  how  does 
that  affect  the  market  as  compared  with  other  days  ? 

Mr.  Nash.  I am  buying  there  right  along.  If  the  prices  are  too 
high  I leave  them  alone. 

Mr.  Clarke.  Having  your  own  business  to  conduct,  and  conduct- 
ing it  as  a competitor  with  the  big  packers,  you  must,  of  course,  try 
to  obtain  such  information  as  you  can,  as  any  good  business  man 
would  do,  and  must  be  trying  to  learn  what  the  other  fellow  is  buy- 
ing? 

Mr.  Nash.  Absolutely. 

Mr.  Kincheloe.  You  made  rather  a broad  statement  when  your 
statement  was  begun,  that  there  was  absolutely  competition  among 
the  big  packers  all  over  the  country. 

Mr.  Nash.  There  certainly  is. 

Mr.  Kincheloe.  At  the  South  St.  Paul  stockyards  you  say  you 
do  not  know  about  that.  What  I am  trying  to  get  at  is,  what  you 
do  know,  and  not  your  opinions.  I want  to  get  it  in  my  own  feeble 
way,  want  to  know  what  the  facts  are. 

Mr.  Nash.  I will  try  to  give  them  to  you.  I say  that  there  is 
competition  in  the  packing  business.  I am  doing  business  over  the 
country,  and  I know  that  the  big  packers  are  competing  with  me  and 
with  each  other.  As  to  the  South  St.  Paul  stockyards  I do  not 
46985—21 10 


146 


MEAT  PACKER. 


know  particularly  about  conditions  there,  because  it  is  rather  an 
inaccessible  market  to  me. 

Mr.  Kincheloe.  I am  asking  for  your  experience. 

Mr.  Nash.  Yes,  sir;  and  that  is  what  I am  trying  to  give  you. 

Mr.  Purnell.  Do  you  buy  the  same  class  of  stuff  that  the  big 
packers  buy? 

Mr.  Nash.  Yes. 

Mr.  Purnell.  The  statement  was  made  by  the  gentleman  I think 
Mr.  Kincheloe  referred  to  that  the  most  of  the  independent  packers 
buy  an  inferior  grade  of  stock,  and  that  therefore  they  did  not  come 
in  direct  competition  with  the  big  packers.  What  have  you  to  say 
about  that  ? 

Mr.  Nash.  That  is  not  true  as  far  as  we  are  concerned. 

Mr.  Kincheloe.  Mr.  Wells’s  testimony  was  that  Mr.  Hormel  bought 
200-pound  hogs  principally. 

Mr.  Purnell.  And  then  as  to  them  there  was  competition. 

Mr.  Kincheloe.  Yes;  and  that  it  raised  the  price  of  hogs  when  he 
got  there. 

Mr.  Purnell.  And  then  when  he  bought  that  stuff  he  came  in 
direct  competition  with  the  packers. 

Mr.  Clague.  About  how  many  cars  a year  do  you  buy  at  South 
St.  Paul  ? 

Mr.  Nash.  Oh,  I do  not  know.  We  have  not  been  in  the  South 
St.  Paul  stockyards  for  several  years  except  occasionally.  We  have 
bought  there,  but  we  go  there  quite  rarely.  If  they  have  a lot  of 
hogs  and  they  look  cheap  we  go  there  and  buy.  But  it  is  too  far  off 
and  transportation  requires  four  or  five  days  to  get  our  hogs  to  Cleve- 
land. 

Mr.  Creigh.  I wondered  whether  Mr.  McLaughlin  of  Nebraska 
would  not  read  from  the  Federal  Trade  Commission’s  report  the 
charge  that  the  small  packers  were  at  the  sufferance  of  the  large  i 
packers,  and  then  ask  Mr.  Nash  about  that  subject.  Ask  what  he  j 
thinks  about  the  Federal  Trade  Commission’s  report  and  conclusions  \ 
on  that  subject.  Do  you  recall  the  sentence  in  the  report  that  the  i 
small  independent  packers  live  at  the  sufferance  of  the  Big  Five? 

Mr.  McLaughlin  of  Nebraska.  I recall  the  statement  but  I do 
not  have  the  page  in  mind. 

Mr.  Creigh.  I wondered  if  you  would  not  be  good  enough  to  ask  j 
Mr.  Nash  to  say  something  on  that  point. 

Mr.  Aswell.  Why  could  not  Mr.  Nash  extend  his  remarks  and 
put  an  explanation  into  the  record. 

Mr.  Nash.  At  the  last  hearing  when  I was  here  we  disagreed  on  i 
that  particular  point,  Mr.  Colver,  at  that  time  chairman  of  the 
Federal  Trade  Commission  and  whom  I used  to  know  in  Cleveland 
several  years  ago,  was  very  much  surprised  to  know  that  I was  against  I 
the  suggested  legislation,  the  legislation  aimed  at  the  packing  industry,  ; 
and  in  speaking  to  me  he  said : 

In  five  years  you  will  be  out  of  business  entirely,  and  in  another  five  years  the  condi- 
tions in  this  country  will  be  that  the  packer's  agent  will  go  to  the  retail  grocer  or  the 
retail  butcher  and  say,  “Here  is  a package  of  crushed  oats.  If  you  do  not  take  these 
you  can  not  get  a ham.” 

Then  he  added : 

You  have  been  living  at  the  sufferance  of  the  big  packers,  and  it  is  only  by  their 
good  will  that  you  are  doing  business  at  all. 


MEAT  PACKER. 


147 


I said: 

I think  you  are  crazy.  I have  been  competing  with  them  all  my  life  and  they  can 
not  ever  put  me  out  of  business.  Twenty-five  years  ago  they  might  have  had  an 
opportunity,  because  of  the  inequality  in  freight  rate3,  but  since  that  time  if  I can 
buy  my  hogs  and  cattle  at  the  same  rate3  as  the  big  fellow  I will  stay,  in  business  as 
long  as  he  will. 

The  Chairman.  You  have  no  objection  to  regulation,  however? 

Mr.  Nash.  Except  that  hampering  of  business  increases  the  cost 
of  doing  business,  and  I do  not  see  that  it  is  doing  anybody  any  good. 

The  Chairman.  In  what  way? 

Mr.  Nash.  The  consumers  have  been  claiming  that  these  bills,  or 
some  of  them,  should  be  enacted.  The  consumers  as  a matter  of  fact 
are  not  going  to  be  benefited  by  any  restriction  of  the  packing  in- 
dustry. 

The  Chairman.  Of  course  they  want  a square  deal  ? 

Mr.  Nash.  On  the  question  of  whether  the  producer  has  had  a 
square  deal,  about  which  there  has  been  more  or  less  complaint,  let 
us  look  at  the  records  and  see  that  on  the  average — — 

The  Chairman  (interposing).  If  they  are  having  a square  deal 
then  legislation  can  do  no  harm. 

Mr.  Nash.  Yes;  but  it  is  possible  for  them  to  get  more  than  a 
square  deal. 

The  Chairman.  Point  out  the  way. 

Mr.  Nash.  In  one  of  these  bills  opportunity  is  given  the  proposed 
commission  to  fix  prices. 

The  Chairman.  Do  you  say  to  '‘fix  prices”  ? 

Mr.  Nash.  Yes,  sir;  and  possibly  they  might  fix  the  prices  at 
which  we  would  have  to  buy  our  live  stock. 

Mr.  Purnell.  I think  you  are  mistaken  about  that. 

Mr.  Nash.  I do  not  think  so. 

Mr.  McLaughlin  of  Nebraska.  There  is  no  such  provision  in  any 
bill  that  has  ever  been  before  this  committee. 

Mr.  Purnell.  I think  we  can  all  venture  the  guess  that  there  will 
be  no  price-fixing  bill  that  will  ever  go  out  of  this  committee,  and 
even  if  it  got  out  of  the  committee  it  would  not  get  through  the 
House. 

Mr.  McLaughlin  of  Nebraska.  You  may  have  in  mind  the  pro- 
vision for  the  fixing  of  rates  and  charges  of  stockyards. 

Mr.  Nash.  It  does  not  definitely  say  what  and  it  might  apply  to 
anything. 

Mr.  Kincheloe.  Well,  let  us  get  that  section  and  see  what  it  does 
apply  to. 

Mr.  Purnell.  Maybe  you  can  dig  up  a joker  in  one  of  these  bills, 
and  if  you  can  we  would  like  to  know  about  it. 

Mr.  Ligiitfoot.  The  provision  I think  Mr.  Nash  refers  to  is  in  the 
i McLaughlin  bill  on  page  23,  subdivision  (e)  of  section  25.  Under 
j the  terms  of  that  clause  the  commission  would  have  power  which 
would  enable  it  to  fix  the  price  of  any  article  which  the  packer  might 
i buy  in  that  it  prevents  any  registrant  from  taking  title  to  any  product 
handled  by  such  registrant  except  under  such  conditions  as  may  be 
prescribed  by  the  rules,  regulations,  and  orders  issued  under  that 
section. 

Mr.  Kincheloe.  That  does  not  say  anything  about  prices. 


148 


MEAT  PACKER. 


Mr.  Lightfoot.  It  says  the  commission  may  forbid  you  to  trade 
except  under  certain  conditions.  It  says  you  can  not  take  title  to 
any  product  except  under  the  rules  of  the  commission.  That  would 
give  them  the  power  to  fix  prices,  wouldn’t  it? 

Mr.  Kincheloe.  That  is  a regulatory  provision.  There  is  nothing 
up  here  in  the  section  giving  them  the  right  to  prescribe  rules,  regu- 
lations, and  orders  to  fix  prices. 

Mr.  McLaughlin  of  Nebraska.  No;  it  is  not  talking  about  prices 
at  all.  It  is  talking  about  a mutual  agreement  that  will  be  entered 
into  between  the  commission  and  the  packers. 

Mr.  Nash.  What  is  this  particular  article  that  says  we  shall  not 
trade,  take  title,  or  buy  from  somebody  else  any  products  except 
under  such  rules  and  regulations  as  may  be  prescribed  ? 

Mr.  McLaughlin  of  Nebraska.  Do  you  refer  to  section  3,  page  23  ? 

Mr.  Nash.  Yes. 

Mr.  McLaughlin  of  Nebraska.  It  refers  to  all  provisions  of  this 
mutual  agreement  entered  into  by  those  who  voluntarily  register 
with  the  department,  and  the  department  then  offers  certain  advan- 
tages to  those  voluntarily  registering,  and  they  then  agree  to  observe 
the  conditions  written  in  here. 

Mr.  Kincheloe.  But  there  is  no  provision  written  in  here  which 
undertakes  to  fix  prices. 

Mr.  McLaughlin  of  Nebraska.  Absolutely  none,  and  it  was 
never  intended. 

Mr.  Lightfoot.  On  that  point,  while  it  may  not  have  been  in- 
tended, and  I do  not  believe  you,  Mr.  McLaughlin,  or  probably  the 
gentleman  who  wrote  this  bill  in  the  Senate  in  the  beginning — of 
which  I think  this  is  a copy,  isn’t  it? 

Mr.  McLaughlin  of  Nebraska.  Yes. 

Mr.  Lightfoot.  Probably  neither  you  nor  he  intended  to  go  that 
far.  But  nevertheless  here  is  Congress  creating  a live-stock  commis- 
sion and  vesting  it  with  certain  powers  general  in  their  terms.  Under 
the  powers  you  are  giving  to  this  commission  one  of  them  is  that  no 
registrant  shall  take  title  to  any  products  handled  by  such  registrant 
except  under  such  conditions  as  may  be  prescribed  in  the  rules, 
regulations  and  orders  of  the  commission,  and  now  get  the  point, 
“ issued  under  this  section.” 

Mr.  McLaughlin  of  Nebraska.  That  does  not  refer  to  the  prices 
they  may  pay. 

Mr.  Lightfoot.  But  that  gives  such  a commission  unbridled  power 
to  make  any  limitations  they  may  see  fit  to  make.  In  other  words, 
there  is  no  limitation  put  on  the  powers  of  the  commission  in  that 
respect.  I am  giving  you  my  view  but  do  not  know  that  you  will 
agree  with  me,  and  yet  this  is  the  thing  we  fear  about  this  kind  of  a 
bill:  There  is  no  limitation  put  on  the  powers  of  the  proposed  com- 
mission, and  therefore  they  may  make  any  rules,  regulations,  and 
orders  they  may  see  fit  to  prescribe.  They  may  prescribe  in  addition 
many  things,  any  condition  that  occurs  to  their  minds;  there  is  no 
limitation  whatever  on  the  matter,  and  one  of  those  conditions 
might  be  that  they  would  say  that  a purchaser  shall  pay  cost  plus  a 
reasonable  profit  on  an  article  purchased  from  the  producer. 

Mr.  McLaughlin  of  Nebraska.  Oh,  no. 

Mr.  Lightfoot.  They  would  certainly  have  the  power  whether 
they  exercised  it  or  not. 


MEAT  PACKEE. 


149 


Mr.  McLaughlin  of  Nebraska.  No,  they  would  not  have  that 
power,  because  the  rules,  regulations,  and  orders  can  only  be  made 
for  the  purpose  of  enforcing  the  provisions  of  this  bill,  and  there  is 
nothing  in  this  bill  about  cost  plus  or  price  fixing. 

Mr.  Ltghtfoot.  Let  us  see  whether  that  is  true  or  not.  This  bill 
says: 

(e)  No  registrant  shall  take  title  to  any  products  handled  by  such  registrant  excep  t 
under  such  conditions  as  may  be  prescribed  in  the  rules,  regulations,  and  orders 
issued  under  this  section. 

And  it  says : 

The  commission  shall  administer  and  enforce  the  provisions  of  this  section  and  of 
all  rules,  regulations,  and  orders  which  it  may  issue  hereunder. 

It  is  prescribed  there  that  the  commission  may  issue  a rule  or  regu- 
lation to  enforce  that  particular  section,  which  includes  the  power  to 
prescribe  the  condition  upon  which  the  registrant  shall  take  title  to 
anything  which  he  may  handle.  In  our  opinion  that  may  include 
the  power  to  prescribe  as  one  of  those  conditions  that  the  registrant 
shall  pay  cost  plus  a reasonable  profit  on  the  products  which  he  might 
buy.  There  is  nothing  in  the  bill  anywhere  that  we  have  been  able 
to  find  which  would  limit  their  right  or  power  to  do  that  if  they 
decided  to  exercise  it  under  the  provisions  of  that  section. 

It  has  been  our  experience  that  whenever  you  create  a commission 
and  vest  it  with  certain  powers  it  goes  ahead  and  exercises  all  the 
powers  that  the  act  was  susceptible  of  giving  to  them  by  construction, 
and,  in  addition,  in  a great  many  instances  they  have  exceeded  those 
powers.  If  you  create  a new  commission  it  will  not  be  governed  by 
what  your  ideas  were  in  the  framing  of  the  bill  if  you  employ  such 
general  language  that  they  may  deduce  from  it  power  to  do  some 
act  that  they  may  see  fit  to  do.  So  we  feel  that  there  is  no  reason 
why  any  commission  or  governmental  bureau  should  be  vested  with 
broad  and  unlimited  powers  to  do  something  that  would  go  that  far. 

Rules,  regulations,  and  orders  are  referred  to  all  the  way  through 
the  bill,  and  there  are  a great  many  other  general  powers  referred  to. 
Now,  for  instance,  may  I point  out  in  section  12,  page  10,  title  (a) : 

Sec.  12.  It  shall  be  unlawful  for  any  packer  to — • 

(a)  Engage  in  any  unfair  or  unjustly  discriminatory  practice  or  device  in  com- 
merce, or  in  any  deceptive  practice  or  device  to  cheat  or  defraud  in  commerce. 

That  is  a broad  general  term.  It  does  not  say  what  is  meant.  The 
committee  by  this  language  is  not  indicating  to  the  commission  what 
it  desires  to  prohibit  in  that  respect,  but  you  are  giving  to  the  pro- 
posed commission  broad  general  powers  to  prevent  unfair  or  unjustly 
discriminatory  practices  or  devices  in  commerce. 

Now  let  us  see  what  that  might  be  construed  to  mean.  If  we  pay 
one  man  one  price  for  a load  of  cattle  in  a stockyard  to-day,  and  then 
later  on  in  the  evening  there  is  a change  in  market  conditions,  and  we 
pay  another  man  a different  price  for  the  same  class  of  cattle,  does 
that  constitute  unjust  discrimination  in  the  yards?  We  do  not 
know.  But  there  is  broad  general  power  there  prohibiting  and  mak- 
ing that  thing  unlawful.  Or,  if  we  buy  for  less  than  cost  it  might  be 
considered  unjust  discrimination. 

Now,  then,  gentlemen  of  the  committee,  this  proposed  commission 
is  by  this  bill  vested  with  power  to  make  rules,  regulations,  and 
orders  carrying  these  things  into  effect.  Who  is  to  determine  what 


150 


MEAT  PACK  Eli. 


is  an  unjust  practice  or  device  in  commerce?  It  is  this  commission. 
They  may  determine  any  of  these  things  to  be  unfair  and  unjust,  and 
can  by  a rule  or  regulation  issued  by  the  commission  prohibit  it  and 
make  it  unlawful. 

What  we  contend  and  I think  what  Mr.  Nash  had  in  mind  if  I 
properly  gathered  it  from  his  statement  is  this,  that  if  you  are  going 
to  regulate  this  particular  industry  in  any  particular  respect  you 
ought  to  specify  what  acts  are  to  be  prohibited,  what  the  abuses 
are  in  particular  terms,  and  make  it  unlawful  to  do  any  of  those 
things.  But  to  create  a new  commission  and  give  it  general  powers, 
such  as  are  contained  in  section  12,  a general  power  undefined,  so 
broad  that  it  will  cover  every  single,  solitary  detail  in  the  packing 
industry  and  in  the  management  and  operation  of  it,  that  they  will 
all  come  within  the  scope  of  the  things  that  are  undertaken  to  be 
prohibited  in  general  terms  and  which  you  are  delegating  to  this 
livestock  commission,  with  power  to  make  rules,  regulations,  and 
orders  to  carry  those  things  into  effect,  you  will  see  how  dangerous 
and  far-reaching  it  would  be. 

After  all  they  will  become  the  real  legislators  on  this  subject, 
because  they  will  be  different  minds  and  will  originate  things  they 
want  to  prohibit  by  rules  and  regulations.  Under  such  a plan  the 
packers  would  not  know  to-day  what  the  law  is  going  to  be  to-morrow, 
and  it  would  create  such  confusion  and  invite  such  despotic  control 
by  bureaucratic  government,  that  the  highly  organized  business 
dealing  in  perishable  products,  the  highly  specialized  business,  would 
be  destroyed.  And,  more  especially,  the  business  could  not  be 
operated  on  the  small,  narrow  margin  of  profit  now  being  employed. 

Really,  gentlemen  of  the  committee,  I think  when  you  come  to  a 
close  analysis  that  the  same  general  powers  contained  in  section  12 
will  carry  with  them  necessarily  the  power  to  put  in  force  rules  and 
regulations  that  will  bring  the  packing  industry  to  the  situation 
where  the  commission  can  make  it  pay  cost  plus  a reasonable  profit 
for  the  livestock  and  other  things  that  they  buy,  without  regard  to 
market  conditions  or  the  law  of  supply  and  demand. 

Take  for  instance  subsection  (c),  if  I may  be  permitted  to  refer 
to  it — 

It  shall  be  unlawful  for  any  packer  to  engage  or  participate  in  any  manner,  either 
directly  or  indirectly,  in  the  business  of  purchasing,  manufacturing,  storing,  or  selling 
foodstuffs  other  than  livestock  products,  where  the  effect  of  such  participation  in  such 
business  may  be  substantially  to  lessen  competition  in  or  to  restrain  commerce  or  to 
tend  to  create  a monopoly  in  commerce. 

You  would  have  power  given  to  the  proposed  commission  to  pro- 
hibit the  packer  from  engaging  in  any  other  lines  of  foodstuffs  than 
livestock  products  if  he  desired  to  do  so  where  the  effect  of  it  would 
be  to  substantially  lessen  competition  and  restrain  commerce,  and 
it  is  at  the  discretion  of  the  proposed  commission  to  determine  when 
that  situation  arises.  And  what  would  prevent  such  a commission, 
if  they  should  decide  it  should  be  the  policy  to  make  the  industry 
to  pay  cost  plus  a reasonable  profit,  to  say  that  unless  you  do  that 
we  will  restrict  you  in  the  sale  of  or  prevent  you  entirely  from  the 
selling  of  any  other  lines  of  foodstuffs  outside  of  the  products  of 
live  stock  ? 


MEAT  PACKER. 


151 


The  power  is  given  to  them  to  do  it.  They  can  exercise  such 
discretion  as  they  see  fit.  You  do  not  say  in  the  bill  when  that  condi- 
tion arises.  It  is  a general  power  which  the  live-stock  commission 
themselves  may  exercise  according  to  their  own  determination  as  to 
when  the  situation  arises. 

I wish  to  call  your  attention  to  the  fact  that  this  is  the  only  pro- 
vision in  any  bill  I have  ever  seen  offered  in  the  Congress  or  anywhere 
else  that  undertakes  to  penalize  and  restrict  and  hamper  the  growth 
of  any  individual  enterprise  unless  it  was  based  upon  an  agreement 
in  restraint  of  trade  with  some  competitor.  If  you  will  notice  the 
language  of  that  provision  you  will  see  how  far-reaching  it  might  be. 
Suppose  you,  by  reason  of  the  superiority  of  your  brands,  or  by  reason 
of  the  successful  handling  of  your  business,  or  by  reason  of  the 
popularity  of  your  establishment,  would  build  up  a demand  for  food- 
stuffs outside  of  live-stock  products  which  you  are  handling  to  the 
point  where  in  the  judgment  of  a governmental  tribunal  you  were 
about  to  get  a monopoly,  or  that  you  were  restraining  trade  in  some- 
way, why,  under  this  provision  it  could  be  prohibited,  and  they  could 
stop  you  off  short  where  you  were,  not  only  stop  you  from  further 
growth  but  put  you  out  of  business. 

Every  other  law  that  undertakes  to  prevent  the  growth  of  a 
monopoly,  or  a so-called  monopoly,  or  something  in  restraint  of 
trade,  is  predicated  upon  an  unlawful  agreement  between  you  and 
some  competitor  that  restricts  trade  in  that  respect.  But  I call 
attention  to  the  fact  that  section  (c)  would  give  this  proposed  com- 
mission power  to  limit  your  growth,  and  to  stop  you  at  a certain 
point,  and  even  to  put  you  out  of  business  entirely,  thus  wrecking 
your  whole  investment  in  all  of  your  plants.  And  why?  Just 
because  they  might  think  you  have  grown  to  the  point  where  they 
feel  that  you  are  lessening  competition  or  restraining  trade. 

Gentlemen  of  the  committee,  it  is  such  general  powers  as  that  that 
we  feel  no  governmental  agency  should  be  given.  If  such  a com- 
mission should  happen  to  be  composed  of  men  interested  in  any  par- 
ticular branch  of  the  industry,  and  if  they  have  the  power  to  say 
when  an  industry  has  grown  big  enough,  or  when  it  is  restraining 
trade,  and  it  is  then  going  to  put  you  out  of  business  or  stop  you 
right  where  you  are,  and  you  can  not  grow  any  larger,  it  is  a pretty 
substantial  power  to  give.  It  is  a pretty  serious  matter  to  employ 
such  broad  and  general  language  in  giving  power  to  a governmental 
agency  as  to  enable  that  agency,  by  suggestion  even  in  the  language, 
to  accomplish  some  other  purpose  or  design  than  that  which  may  have 
been  really  intended  by  those  who  wrote  the  bill. 

Mr.  Clarke.  Mr.  Chairman,  suppose  you  let  us  finish  with  Mr. 
Nash.  _ 

The  Chairman.  Yes;  let  us  proceed  in  the  regular  order. 

Mr.  Lightfoot.  I beg  your  pardon. 

Mr.  McLaughlin  of  Nebraska.  Mr.  Nash,  in  making  the  statement 
that  some  of  the  bills  here  may  have  to  do  with  price  fixing,  I ask 
you  now  is  this  subsection  (e)  on  page  23  the  section  to  which  you 
refer  of  this  bill  ? 

Mr.  Nash.  Yes,  sir;  that  is  the  one. 

Mr.  McLaughlin  of  Nebraska.  I wanted  to  know  if  that  is  the  one 
you  had  reference  to  as  price  fixing  ? 


152 


MEAT  PACKER. 


Mr.  Nash.  Yes;  that  is  the  one. 

The  Chairman.  What  other  provisions  are  there  in  any  of  the  bills 
that  would  ruin  anybody  or  work  an  injustice  to  anybody  who  is 
engaged  in  a legitimate  enterprise  ? 

Mr.  Nash.  I spoke  about  the  necessity  under  one  of  the  bills,  for 
all  of  the  packers  to  give  up  their  stockyard  interests. 

The  Chairman.  Why,  the  bill  only  applies  to  about  30  stock- 
yards,  those  that  handle  over  150,000  head  of  cattle. 

Mr.  Nash.  That  would  include  all  of  the  big  yards  and  that  would 
affect  us. 

The  Chairman.  Aren’t  you  for  fair  dealing  in  the  stockyards  ? 

Mr.  Nash.  Yes,  sir;  absolutely. 

The  Chairman.  You  want  the  traders  and  commission  men  to  be 
regulated  and  for  everybody  to  be  given  a square  deal  ? 

Mr.  Nash.  I do  not  want  to  be  forced  to  sell  my  stockyards  stock. 

The  Chairman.  Oh,  this  does  not  compel  that  of  the  stockyards 
at  all.  You  are  speaking  about  the  decree  ? 

Mr.  Nash.  Oh,  no.  We  are  not  in  the  decree.  This  applies  to 
packers  both  large  and  small,  one  of  these  bills  does,  and  says  that 
they  must  all  get  rid  of  their  stock  in  stockyards  that  handle  over  a 
certain  amount  of  stock. 

Mr.  Voigt.  Where  is  that  provision  ? 

The  Chairman.  You  are  speaking  of  the  McLaughlin  bill,  are  you? 

Mr.  Nash.  I do  not  know  as  to  that,  but  it  is  one  of  the  bills. 

Mr.  Voigt.  Is  it  section  13  of  the  McLaughlin  bill  ? 

Mr.  Clarke.  Yes;  on  page  11. 

Mr.  Voigt.  You  will  notice  there  at  line  15,  page  11,  of  the  Mc- 
Laughlin bill,  it  is  provided  that: 

No  packer  shall  own  any  interest,  etc.,  in  a stockyard  unless  the  commission  shall 
determine  that  such  ownership  or  control,  etc.,  is  not  in  violation  of  this  act. 

Mr.  Nash.  They  may  decide  that  it  is  and  they  may  decide  that 
it  is  not. 

Mr.  Voigt.  Oh,  but  you  can  not  assume  that  it  is  going  to  be  an 
idiotic  commission.  I assume  that  if  there  is  a commission  or  any 
other  agency  it  is  going  to  use  reasonable  judgment. 

Mr.  McLaughlin  of  Nebraska.  At  least  to  have  horse  sense. 

Mr.  Clarke.  I say  that  the  operators  of  the  income  tax  law  were 
about  as  idiotic  a crowd  as  I ever  heard  of. 

Mr.  Nash.  I do  not  see  why  such  language  should  be  used  at  all. 
After  I have  put  my  good  money  in  a stockyards,  and  have  done 
my  best  to  develop  them,  why  ought  I to  be  asked  to  sell  my  stock  ? 

Mr.  Voigt.  By  reason  of  the  fact  that  the  packer  controls  the 
stockyards 

Mr.  Nash  (interposing).  But  we  do  not  own  the  stockyards. 

Mr.  Voigt.  If  you  own  the  stock  of  a stockyards  company  you 
are  controller  of  the  stockyards. 

Mr.  Nash.  No;  we  are  not  unless  we  own  51  per  cent. 

Mr.  Voigt.  Well,  you  and  the  others  together. 

Mr.  Nash.  Well,  as  to  the  others  I do  not  know  about  that.  There 
is  no  possible  way  I know  of  whereby  we  could  combine  to  control 
those  stockyards.  Our  interest  is  small. 

Mr.  Voigt.  Wait  a minute.  If  you  and  a lot  of  others  own  stock 
in  a corporation  which  controls  stockyards,  then  you  collectively 
own  the  stockyards  ? 


MEAT  PACKER. 


153 


Mr.  Nash.  Sure,  the  majority  of  the  owners  do. 

Mr.  Voigt.  Then  you  packers  collectively  would  own  the  stock- 
yards,  and  you  may  thereby  have  an  advantage. 

Mr.  Nash.  What  are  the  advantages  ? 

Mr.  Voigt.  The  Federal  Trade  Commission  says  the  packers  have 
many  advantages  that  outsiders  have  not  got. 

Mr.  Nash.  Well,  it  may  occur  somewhere  that  I do  not  know 
about,  but  it  does  not  occur  in  our  yards. 

Mr.  Voigt.  If  you  can  prove  to  any  regulating  agency  that  there 
is  no  unfair  practice,  I would  not  be  afraid  of  an  order  being  issued 
by  the  commission. 

Mr.  Nash.  The  interest  of  the  packer  is  to  build  up  the  stockyards, 
to  make  it  of  advantage  to  him  as  the  owner  of  stock.  That  is  what 
we  are  interested  in  in  the  Cleveland  yards,  to  boost  the  yards,  get 
bigger  receipts,  and  get  more  stock  there.  That  is  why  we  are 
interested  there;  that  is  a part  of  our  business. 

Mr.  McLaughlin  of  Nebraska.  There  seem  to  have  been  some 
practices  in  the  South  St.  Paul  stockyards  that  needed  regulation, 
though  there  may  not  be  in  yours. 

Mr.  Nash.  I do  not  think  that  a bad  step  in  any  one  industry 
should  condemn  the  whole  industry.  I do  not  know  anything  about 
the  South  St.  Paul  stockyards,  but  if  any  trouble  exists  there  I do 
not  think  it  necessarily  exists  all  over  the  country. 

Mr.  McLaughlin  of  Nebrasksa.  No;  but  if  it  exists  at  several 
places  and  can  be  corrected  without  injury  to  you,  why  not  have  it 
done  ? 

Mr.  Kincheloe.  If  it  exists  somewhere  else  it  will  not  bother  you 
if  it  is  corrected. 

Mr.  Nash.  I am  afraid  they  will  tell  us  to  get  rid  of  our  stock. 
They  have  the  power  under  that  provision,  and  it  would  be  up  to 
them  to  act.  I do  not  think  they  should  have  the  right  to  do  that. 
I do  not  see  anything  illegitimate  about  a packer  owning  stock  in  a 
stockyards. 

Mr.  McLaughlin  of  Nebraska.  You  can  not  assume  that  a disin- 
terested commission,  if  appointed  by  the  President,  will  go  out  there 
with  the  sole  purpose  of  destroying  an  industry. 

Mr.  Nash.  I do  not  know,  I am  sure. 

Mr.  Kincheloe.  You  might  just  as  well  say  that  the  Interstate 
Commerce  Commission,  created  for  the  purpose  of  controlling  rail- 
roads, is  intending  to  destroy  the  railroads.  I think  that  would  be 
a far-fetched  idea,  to  say  the  least. 

Mr.  Nash.  Well,  it  gives  to  the  commission  too  big  powers. 

Mr.  Kincheloe.  If  they  do  not  have  some  powers  they  can  not 
regulate  the  matter. 

Mr.  Nash.  I do  not  see  the  reason  for  that. 

Mr.  Kincheloe.  There  is  a debatable  point  as  to  the  question  as 
to  whether  you  may  give  them  too  much  power.  But  to  go  on  the 
hypothesis  that  the  commission  is  going  to  abuse  its  power  and  will 
go  there  for  the  purpose  of  destroying  the  business  is  not  a point 
that  I think  people  could  differ  about. 

Mr.  Ten  Eyck.  Who  corrected  the  abuse  in  private  car  ownership 
that  existed  in  the  past  ? 


154 


MEAT  PACKER. 


Mr.  Nash.  I do  not  think  there  was  an  abuse  in  private  car  owner- 
ship, hut  the  Interstate  Commerce  Commission  has  the  power  to  fix 
just  rates. 

Mr.  Ten  Eyck.  The  Interstate  Commerce  Commission  did  it  some 
time  ago. 

Mr.  Nash.  Yes,  sir;  it  did. 

Mr.  Ten  Eyck.  Along  that  line  let  me  observe  that  the  innocent, 
law-abiding  citizen  is  not  afraid  of  the  policeman. 

Mr.  Nash.  No,  sir. 

Mr.  Ten  Eyck.  He  really  wants  him. 

Mr.  Nash.  Yes,  sir. 

Mr.  Ten  Eyck.  If  we  do  not  go  beyond  the  point  of  doing  what  is 
beneficial — that  is,  if  we  do  not  do  anything  hurtful  to  trade — regu- 
lations of  that  kind  would  be  good,  would  they  not  ? 

Mr.  Nash.  There  may  be  good  commissions,  but  I do  not  think  the 
Federal  Trade  Commission  has  done  our  business  any  good.  That 
is  one  commission  that  did  not  do  any  good  for  us.  We  are  afraid 
of  commissions  if  they  are  going  to  be  like  the  Federal  Trade  Com- 
mission. 

Mr.  Voigt.  Do  you  claim  the  Federal  Trade  Commission  has  made 
an  untruthful  report  ? 

Mr.  Nash.  Inferentially;  yes,  sir.  The  inferences  they  draw  are 
unjust  and  unfair. 

Mr.  Voigt.  In  what  respect  ? 

Mr.  Nash.  That  I can  not  remember,  but  there  were  plenty,  plenty 
of  unjust  remarks  made  in  that  report. 

Mr.  Voigt.  What  unjust  remarks  did  the  Federal  Trade  Commis- 
sion make  about  your  individual  business  ? 

Mr.  Nash.  Nothing  at  all.  They  never  came  to  see  us. 

Mr.  Voigt.  You  are  not  complaining  so  far  as  you  personally  are 
concerned  ? 

Mr.  Nash.  No;  but  I am  a part  of  the  packing  industry.  If  the 
industry  is  hurt,  I am  hurt. 

Mr.  Voigt.  The  report  of  the  Federal  Trade  Commission  is  aimed 
chiefly  at  the  Big  Five. 

Mr.  Nash.  I know  it  is.  They  claim  to  be  very  fond  of  the  inde- 
pendent packer. 

Mr.  Voigt.  Will  you  state  specifically  how  that  report  has  hurt 
your  business  ? 

Mr.  Nash.  Yes.  It  has  affected  our  foreign  trade  tremendously 
and  the  standing  in  which  we  were  held  abroad.  All  of  England 
thinks  that  the  packers  are  robbers,  are  getting  rich,  are  making  a 
lot  of  money,  and  they  won’t  believe  anything  else,  and  it  has  affected 
our  trade  very  much;  all  our  foreign  trade  has  been  affected. 

Mr.  Voigt.  You  mean  your  foreign  trade  has  fallen  off? 

Mr.  Nash.  Yes.  Of  course,  there  are  other  reasons  for  it  at  this 
time,  but  that  report  of  the  Federal  Trade  Commission  was  taken 
over  to  England,  and  all  over  the  world,  I guess,  and  was  very  det- 
rimental in  my  opinion  to  the  packing  industry  in  this  country  and 
to  agriculture  generally. 

Mr.  Voigt.  The  fact  that  you  can  not  sell  any  of  your  products 
abroad  is  due  to  other  causes  than  this  report  ? 

Mr.  Nash.  Right  now  of  course  that  is  true.  But  this  report  of 
the  Federal  Trade  Commission  has  been  out  some  time.  We  have 


MEAT  PACKER.  155 

been  prejudiced  all  over  the  world,  the  packers  have  been  prejudiced 
in  the  eyes  of  the  people  of  the  world  by  reason  of  that  report. 

Mr.  Voigt.  If  the  report  of  the  Federal  Trade  Commission  is  true 
and  has  had  the  effect  of  hurting  the  packing  industry  then  do  you 
claim  that  the  report  should  have  been  withheld  ? 

Mr.  Nash.  If  it  were  true,  no;  it  should  not  have  been  withheld. 

Mr.  Voigt.  Are  you  prepared  to  say  it  is  not  true? 

Mr.  Nash.  That  is  a pretty  broad  question.  I am  prepared  to  say 
that  there  are  plenty  of  things  in  it  that  are  not  true. 

Mr.  Voigt.  Can  you  point  out  specifically  which  things  in  it  are 
not  true  ? 

Mr.  Nash.  No;  but  I will  be  very  glad  to  do  so  if  I am  given  the 
opportunity  to  look  over  the  report.  I will  point  out  this  afternoon 
what  I think  are  untrue  remarks  contained  in  that  statement,  if  you 
wish. 

Mr.  Voigt.  It  is  claimed  by  the  Federal  Trade  Commission  that 
there  is  an  agreement  among  the  Big  Five  for  the  purchase  of  live 
stock.  You  claim  that  that  part  of  their  report  is  untrue  ? 

Mr.  Nash.  No;  I do  not  know  anything  about  the  operations  of 
the  Big  Five  among  themselves. 

Mr.  Creigh.  Let  me  say,  Mr.  Voigt,  for  the  Cudahy  people,  that 
that  certainly  is  untrue. 

Mr.  Voigt.  But  I am  asking  this  witness  at  this  time. 

Mr.  Creigh.  I beg  your  pardon. 

Mr.  Nash.  I do  not  know  about  that. 

Mr.  Voigt.  That  is  the  chief  point  in  my  opinion  in  the  report  of 
the  Federal  Trade  Commission.  You  say  you  do  not  know  anything 
about  that  point  ? 

Mr.  Nash.  The  only  thing  I can  say  about  that  is,  that  if  they  are 
in  collusion  they  are  not  going  to  let  me  in  on  it. 

Mr.  Voigt.  You  make  the  sweeping  charge  that  the  report  of  the 
Federal  Trade  Commission  is  untrue. 

Mr.  Nash.  I do. 

Mr.  Voigt.  That  is  the  chief  point  in  the  report  of  the  Federal 
Trade  Commission,  and  yet  you  say  you  do  not  know  anything  about 
that? 

Mr.  Nash.  Well,  go  to  the  Big  Five  for  information  on  that  point. 
Why  should  you  ask  me  ? 

Mr.  Voigt.  I am  asking  you  now  because  you  are  testifying  and 
you  claim  that  this  report  contains  untrue  statements. 

Mr.  Nash.  Yes;  but  it  deals  with  far  more  matters  than  that. 

Mr.  Voigt.  In  my  judgment  that  is  the  chief  thing  in  the  report 
of  the  Federal  Trade  Commission,  that  those  gentlemen  are  in 
collusion. 

Mr.  Nash.  All  right.  There  are  books  and  reams  of  stuff  that 
do  not  deal  with  the  Big  Five. 

Mr.  Voigt.  It  deals  with  other  practices  of  the  Big  Five. 

Mr.  Nash.  Yes.  Some  of  those  I am  prepared  to  show  are  untrue 
that  I know  about.  But  I do  not  know  about  that  matter. 

Mr.  Voigt.  Now,  then,  is  there  any  practice  that  the  Federal 
Trade  Commission  has  accused  the  Big  Five  of  that  is  unwarranted 
by  the  facts,  in  your  judgment? 

Mr.  Nash.  Yes;  I think  there  are  many. 

Mr.  Voigt.  Will  you  state  them  specifically  ? 


156 


MEAT  PACKER. 


Mr.  Nash.  I do  not  remember  them  now.  I am  going  to  have- 
to  refresh,  my  memory  by  reading  the  report.  I have  not  read  it 
since  it  came  out. 

Mr.  Voigt.  Then  you  can  not  testify  before  this  committee. 

Mr.  Nash.  They  have  allowed  me  an  opportunity  to  read  the 
report  of  the  Federal  Trade  Commission  before  I make  any  more 
statements  about  it. 

Mr.  Voigt.  Well,  then,  you  are  in  a mental  frame  now  where 
you  can  not  intelligently  discuss  the  subject. 

Mr.  Nash.  I do  not  think  I can  give  specific  points  now  out  of 
that  report,  or  immediately.  I would  have  to  look  over  the  report. 

Mr.  Voigt.  You  are  not  in  collusion  with  anybody  in  your  busi- 
ness, I take  it  ? 

Mr.  Nash.  No,  sir. 

Mr.  Voigt.  Do  you  object  to  any  law  which  will  restrain  others 
from  acting  in  collusion  in  the  meat  packing  industry? 

Mr.  Nash.  Well,  now,  I do  not  want  anybody  to  be  in  collusion 
if  it  is  going  to  be  detrimental  to  the  business. 

Mr.  Voigt.  I asked  you  a fair  question. 

Mr.  Nash.  I will  say  that  I am  not  in  favor  of  collusion. 

Mr.  Voigt.  Would  you  object  to  a law  that  would  prevent  it? 

Mr.  Nash.  No. 

Mr.  Voigt.  Would  you  object  to  any  law  that  would  make  the 
Big  Five  or  any  other  packer  do  business  on  the  square  ? 

Mr.  Nash.  No,  sir.  I think  we  have  such  laws  now.  The  Federal 
Trade  Commission  is  already  a body  that  is  supposed  to  do  that, 
and  we  have  laws  to  prevent  unfair  practices  and  acts  in  restraint 
of  trade. 

Mr.  Voigt.  If  the  present  laws  are  inadequate  to  prevent  collusion 
would  you  object  to  the  enactment  of  additional  laws? 

Mr.  Nash.  No,  sir. 

Mr.  Voigt.  Then  you  are  not  altogether  opposed  to  legislation 
to  regulate  the  packers  ? 

Mr.  Nash.  I am  opposed  to  legislation  to  regulate  the  packers 
until  any  evil  that  is  alleged  to  exist  has  been  explained  and  brought 
out.  I claim  that  evils  in  the  packing  business  have  been  guessed 
at  and  have  been  theorized  about,  but  nobody  has  ever  pointed  them 
out.  They  have  been  guessing. 

Mr.  Voigt.  The  Federal  Trade  Commission  has  pointed  out  very 
definitely  that  the  Big  Five  packers  are  in  collusion.  You  say  you 
do  not  know  anything  about  that  at  all  ? 

Mr.  Nash.  At  the  time  the  Federal  Trade  Commission  was  making 
an  investigation  of  the  packing  industry  they  never  came  to  us  as  an 
old  firm  of  independent  packers.  They  never  asked  me  for  any 
testimony. 

Mr.  Voigt.  They  do  not  charge  you  with  anything,  either. 

Mr.  Nash.  No;  but  they  might  have  come  and  gotten  my  views. 

I am  supposed  to  know  something  about  the  packing  business. 

Mr.  Voigt.  Suppose  they  had  come  to  you  and  asked  you  for  your 
views  as  to  whether  the  Big  Five  packers  were  in  collusion? 

Mr.  Nash.  I would  know  as  much  about  that  as  anybody  else  out- 
side would  know. 

Mr.  McLaughlin  of  Nebraska.  How  about  their  books  ? 


MEAT  PACKER. 


157 


Mr.  Nash.  Well,  that  is  the  place  to  get  it.  But  they  went  around 
and  asked  people  who  had  lost  money  and  did  not  come  to  many 
independent  packers  who  had  no  connection  whatever  with  the  Big 
Five.  It  was  an  ex  parte  investigation,  and  the  whole  industry  was 
not  asked  to  give  their  views  at  all. 

Mr.  Voigt.  When  they  investigated  the  Big  Five,  didn’t  they 
assume  the  right  course  when  they  looked  at  their  books  ? 

Mr.  Nash.  Yes,  sir;  that  is  right. 

Mr.  Voigt.  If  they  had  come  to  you,  you  could  not  have  given 
them  any  definite  information  ? 

Mr.  Nash.  No,  sir;  only  general  information  as  to  competition, 
and  whether  we  competed  with  the  Big  Five  at  places  where  we  did 
•compete  them.  We  could  give  them  information  that  anybody 
else  could  give  them  who  had  been  for  years  in  the  business.  We 
buy  our  livestock  in  competition  with  them  and  sell  our  products 
in  competition  with  them,  and  we  could  have  told  them  about  that. 

Mr.  Voigt.  I think  that  feature  of  it  is  covered  by  the  report. 

Mr.  Nash.  I do  not  know,  but  it  did  not  strike  me  that  it  was. 

Mr.  Kincheloe.  I am  very  much  interested  in  Mr.  Nash  having 
an  opportunity  to  go  over  the  report  of  the  Federal  Trade  Com- 
mission and  that  he  should  point  out  specifically  the  things  that  are 
absolute  falsehoods,  if  they  are  in  fact,  and  I want  to  know  about 
them. 

Mr.  Nash.  I will  be  glad  to  do  that. 

The  Chairman.  You  object  to  section  13  of  this  bill  requiring  the 
packers  to  dispose  of  their  interests  in  the  stockyards.  In  your 
opinion,  would  adequate  stockyards  facilities  be  provided  for  in  many 
instances  ? I have  reference  to  the  smaller  packers. 

Mr.  Nash.  Would  what  ? 

The  Chairman.  Would  adequate  stockyards  facilities  be  furnished 
if  the  big  packers  got  out  ? I have  reference  to  the  smaller  places. 

Mr.  Nash.  Why,  in  the  most  of  the  smaller  places  they  have 
adequate  stockyards. 

The  Chairman.  The  smaller  packers  have  them  at  their  own 
plants  ? 

Mr.  Nash.  Yes,  sir;  at  the  smaller  places  they  are  at  their  own 
plants,  if  they  have  them,  and  they  would  not  change  that  position. 

The  Chairman.  I am  speaking  of  the  smaller  places,  such  as  we 
have  in  Iowa,  where,  for  instance,  there  is  only  one  or  two  packers. 

Mr.  Nash.  I do  not  think  the  fact  that  the  packers  got  out  of  the 
stockyards  in  the  big  centers  wTould  affect  the  smaller  points  at  all. 

The  Chairman.  This  is  a general  provision  to  require  all  of  them. 

Mr.  Nash.  Yes,  sir;  those  having  150,000  head  of  cattle. 

The  Chairman.  No;  section  13  does  not  place  that  limit  on  it. 

Mr.  Nash.  I believe  not. 

Mr.  Purnell.  Have  you  discovered  any  discrimination  against 
you  in  buying  in  yards  where  you  have  no  interest  ? 

Mr.  Nash.  No;  not  at  all. 

Mr.  Kincheloe.  Do  you  think,  as  a general  proposition,  it  is  of 
benefit  to  the  packer  in  dollars  and  cents  to  own  an  interest  in 
stockyards  ? 

Mr.  Nash.  Yes;  I do.  And  it  is  a good  thing  for  the  industry  for 
him  to  own  it,  because  he  is  interested  in  building  up  that  yard. 


158 


MEAT  PACKER. 


Here  is  the  position  that  we  take  as  owners  of  the  Cleveland  Stock- 
yards  stock.  We  want  to  build  that  yard  up  so  that  we  do  not  have 
to  go  to  Indianapolis,  or  to  Chicago,  or  to  St.  Louis,  or  to  Omaha,  or 
to  Kansas  City  for  our  stock.  We  want  to  buy  them  at  home. 

Mr.  Kincheloe.  Where  does  it  benefit  Swift  & Co.  to  have  an 
interest  in  your  stockyards  ? 

Mr.  Nash.  They  have  a plant  there. 

Mr.  Kincheloe.  How  much  of  the  stock  do  they  own  ? 

Mr.  Nash.  They  own  a little  less  than  10  per  cent;  about  8 per 
cent. 

Mr.  Kincheloe.  Do  any  other  owners  of  the  Swdft  company  own 
any  of  the  stock  in  your  yards  ? 

Mr.  Nash.  Any  what  ? 

Mr.  Kincheloe.  Do  any  other  owners  of  the  Swift  Packing  Co- 
own  any  stock  in  the  Cleveland  Stockyards  ? 

Mr.  Nash.  I do  not  know. 

The  Chairman.  Are  you  opposed  to  regulations  regulating  the 
various  yards  to  see  that  everybody  has  a square  deal  ? 

Mr.  Nash.  No,  sir. 

The  Chairman.  Any  other  questions,  gentlemen  of  the  committee  ? 

Mr.  Ten  Eyck.  I would  lDe  to  ask  a question  or  two.  Do  you 
prohibit  any  purchaser  of  live  stock  from  doing  business  on  your 
yards  ? I mean,  do  you  prohibit  any  producer  of  live  stock  from 
selling  on  your  stockyards  ? 

Mr.  Nash.  No,  sir. 

Mr.  Ten  Eyck.  Can  anyone  come  in  from  the  outside  and  purchase  % 

Mr.  Nash.  Anybody  at  all.  It  is  absolutely  an  open  market. 

Mr.  Ten  Eyck.  In  other  words,  you  have  not  a board  there  that 
one  has  to  be  a member  of  before  he  can  deal  in  the  yards  ? 

Mr.  Nash.  Well,  I do  not  know  what  you  mean  by  a purchaser 
of  stock.  It  is  not  usual  for  a producer  of  stock  to  sell  his  own  stock 
in  the  yards.  It  is  customary  for  a producer  to  sell  to  a so-called 
jobber,  who  collects  a carload  in  the  country  and  ships  it  to  the 
yards. 

Mr.  Ten  Eyck.  I understand  that;  but  can  a producer  ship  his 
stock  in  there  in  carload  lots  ? 

Mr.  Nash.  Yes,  sir. 

Mr.  Ten  Eyck.  What  would  be  the  procedure  ? 

Mr.  Nash.  The  procedure  would  be  for  him  to  collect  a carload 
of  live  stock  and  ship  it  in  to  some  commission  man,  or  consign  it  to 
some  commission  men,  and  he  either  comes  with  the  stock  or  does 
not,  and  turns  it  over  to  the  commission  man  to  sell  for  him. 

Mr.  Ten  Eyck.  In  other  words,  he  could  not  sell  it  himself  ? It 
would  have  to  go  through  a commission  man  ? 

Mr.  Nash.  Yes,  sir.  I do  not  think  he  could  sell  it  himself.  It 
would  probably  go  through  a commission  man.  But  what  has  hap- 
pened recently  is  that  combinations  of  producers  have  formed  asso- 
ciations and  have  representatives  in  the  yards. 

Mr.  Ten  Eyck.  But  there  might  be  individuals  who  might  send 
in  a carload  to  your  yards  ? 

Mr.  Nash.  Direct  to  a plant  but  not  to  the  stockyards. 

Mr.  Ten  Eyck.  Yes;  to  the  stockyards. 

Mr.  Nash.  To  us  at  the  stockyards  ? 


MEAT  PACKER. 


159 


Mr.  Ten  Eyck.  To  the  stockyards  for  sale,  and  to  make  returns 
for  the  stock. 

Mr.  Nash.  It  would  be  handled  by  a commission  man  in  the 
yards. 

Mr.  Ten  Eyck.  He  would  have  to  turn  that  over  to  a commission 
man  in  the  yards  ? 

Mr.  Nash.  Yes,  sir. 

Mr.  Ten  Eyck.  And  pay  him  a commission  ? 

Mr.  Nash.  Yes,  sir. 

Mr.  Clarke.  What  is  that  commission  ordinarily? 

Mr.  Nash.  I do  not  remember. 

Mr.  Clarke.  Is  it  on  a percentage  basis  ? 

Mr.  Nash.  No,  sir;  I think  it  is  so  much  a car,  $10  or  $12  for 
double-deck  cars  or  something  of  that  sort.  It  is  a little  different 
for  hogs  than  for  cattle.  It  is  approximately  equal  at  all  yards  in 
the  country.  I think  the  charges  in  all  yards  in  the  country  are 
approximately  alike. 

Mr.  Clarke.  Do  those  commission  men  all  own  stock  in  your 
yards  ? 

Mr.  Nash.  Oh,  no. 

Mr.  Clarke.  What  privilege  do  they  buy  or  own,  or  what  do  they 
pay  your  company  for  operating  there  ? 

Mr.  Nash.  They  do  not  pay  anything,  because  we  are  glad  to  have 
them  come,  for  the  reason  that  the  more  commission  men  who  operate 
there  the  more  stock  that  is  likely  to  come  there. 

Mr.  Clarke.  They  pay  no  privilege  for  operating  in  the  yards? 

Mr.  Nash.  No,  sir. 

Mr.  Clarke.  They  pay  no  percentage  for  cleaning  up  the  yards? 

Mr.  Nash.  No,  sir.  It  has  nothing  to  do  with  them  at  all. 

Mr.  Clarke.  Who  pays  for  the  running  of  your  yards  ? Where  do 
you  get  the  money  to  take  care  of  that  expense  ? 

Mr.  Nash.  Every  yard  charges  a yardage  per  head  on  the  stock 
received.  That  and  the  feed  that  they  sell  to  the  owners  of  the  stock 
through  the  commission  men  makes  the  profits  of  the  yards. 

Mr.  Kincileloe.  You  do  charge  commission  men  a yardage  ? 

Mr.  Nash.  No;  he  charges  that  to  the  shipper.  The  shipper  pays 
any  fee  that  the  commission  man  pays  for  the  stock. 

Mr.  Kxncheloe.  You  charge  the  commission  man  a yardage  ? 

Mr.  Nash.  No;  the  shipper  pays  everything.  He  pays  the  com- 
mission man  for  the  yardage  fees  and  everything  else. 

Mr.  Kincheloe.  Sure,  it  eventually  comes  out  of  the  shipper.  I 
wanted  to  know  how  it  was  done. 

Mr.  Nash.  The  commission  man  charges  the  shipper  and  the  yard 
collects  the  yardage. 

Mr.  Ten  Eyck.  Who  has  charge  of  the  weighing  ? 

Mr.  Nash.  It  is  in  charge  of  the  public  weighmasters. 

Mr.  Ten  Eyck.  That  is,  a man  employed  by  the  city  of  Cleveland  ? 

Mr.  Nash.  No. 

Mr.  Ten  Eyck.  What  do  you  call  them  ? 

Mr.  Nash.  They  are  certified  weighmasters. 

Mr.  Ten  Eyck.  Who  pays  their  salaries  ? 

Mr.  Nash.  The  stockyards  company. 

Mr.  Kincheloe.  Wlio  employs  them  ? 

Mr.  Nash.  The  stockyards  company. 


160 


MEAT  PACKER. 


Mr.  Kincheloe.  Then  they  are  not  public  weighmasters. 

Mr.  Nash.  They  are  called  public  weighmasters,  because  they  are 
er  titled. 

Mr.  Ten  Eyck.  Who  weighs  the  grain  that  is  fed  to  stock? 

Mr.  Nash.  I believe  the  stockyards  company. 

Mr.  Ten  Eyck.  Are  they  in  the  grain  business  themselves,  and  do 
they  sell  grain  and  other  feed  ? 

Mr.  Nash.  They  buy  grain  by  the  carload  and  sell  it  to  the  com- 
mission man  for  the  account  of  the  shipper.  The  commission  man 
buys  it  for  his  shipper’s  account  when  he  feeds  his  stock. 

Mr.  Ten  Eyck.  Does  he  get  a commission  on  the  transaction  as 
to  grain  ? 

Mr.  Nash.  Oh,  no. 

Mr.  Ten  Eyck.  In  other  words,  he  does  that  for  the  shipper  ? 

Mr.  Nash.  Yes,  sir. 

Mr.  Ten  Eyck.  The  commission  that  he  gets  is  for  the  selling  of 
the  cattle  ? 

Mr.  Nash.  Yes,  sir. 

Mr.  Clague.  Who  fixes  the  price  of  hay  and  grain  that  you  sell, 
that  the  stockyards  company  sells  ? 

Mr.  Nash.  The  stockyards  company. 

Mr.  Purnell.  Does  the  State  of  Ohio  exercise  any  supervision 
over  your  yards  ? 

Mr.  Nash.  I think  not.  I never  heard  of  it  if  it  does. 

Mr.  Ten  Eyck.  Do  you  sell  your  feed,  grain,  and  hay  at  a reason- 
able profit  ? 

Mr.  Nash.  Well,  I do  not  know  what  the  prices  are  now.  I think 
they  are  fairly  reasonable  prices,  however. 

Mr.  Ten  Eyck.  But  you  do  figure  on  making  some  money  out  of 
that  toward  the  running  of  the  yards  ? 

Mr.  Nash.  Oh,  yes;  they  get  a profit  on  it. 

Mr.  Clarke.  What  are  the  average  dividends  one  year  after 
another  from  your  stockyards  ? 

Mr.  Nash.  That  are  paid  by  our  stockyards  ? 

Mr.  Clarke.  Yes. 

Mr.  Nash.  Ten  per  cent. 

The  Chairman.  To  what  other  provisions  of  the  bills  do  you  object  ? 

Mr.  Nash.  I object  to  the  general  terms,  to  the  giving  of  such 
general  powers  to  a commission  to  make  their  own  rules  and  regula- 
tions and  to  interpret  them.  I think  they  might  be  very  embarrass- 
ing to  the  business,  unnecessarily  so. 

The  Chairman.  Somebody  must  make  rules  and  regulations,  if 
there  are  to  be  rules  and  regulations. 

Mr.  Nash.  I am  not  for  any  regulations. 

The  Chairman.  You  are  opposed  to  regulation? 

Mr.  Nash.  Yes,  sir. 

The  Chairman.  Can  we  have  assurances  of  fair  practices  without 
regulations  and  somebody  with  the  power  to  enforce  them  ? 

Mr.  Nash.  I think  we  can.  I think  we  can  have  the  assurance  of 
fair  practices  in  the  business  without  specializing  in  legislation 
against  one  business.  Unfair  practices  in  any  other  business,  if 
there  are  such,  are  just  as  bad  as  in  the  packing  business. 

The  Chairman.  Don’t  you  think  there  is  enough  in  the  report  of 
the  Federal  Trade  Commission  to  warrant  a suspicion  that  legisla- 


MEAT  PACKER. 


161 


tion  should  be  enacted  to  correct  some  of  the  evils  that  exist,  if  they 
do  exist,  and  if  they  do  not  exist  I will  say  that  there  is  no  harm  done. 

Mr.  Nash.  Except  this  tremendous  power  to  be  given  to  one,  two, 
or  three  men,  who  might  be  prejudiced  before  they  go  on  the  com- 
mission or  become  prejudiced  after  they  go  on.  It  is  an  awful  power 
to  give  a commission  over  an  industry  for  the  correction  of  evils  that 
are  alleged  but  that  have  never  been  proven. 

The  Chairman.  Of  course  the  packers  are  to  have  their  day  in 
court  in  the  case  of  any  commission  that  might  be  set  up.  There  is 
no  effort  being  made  to  deprive  anyone  of  his  rights,  and  it  could  not 
be  done  if  it  was  undertaken. 

Mr.  Nash.  As  I was  saying  a while  ago,  it  seems  to  me  in  the  ab- 
sence of  proof  that  the  packers  have  not  been  fair  to  the  producers 
or  the  consumers,  it  is  not  necessary  to  have  any  such  legislation. 
I am  assuming,  and  I think  I am  correct  in  stating  that  the  beginning 
of  the  desire  for  packer  legislation  came  from  the  producers,  who  felt 
that  they  had  not  been  used  right  for  a long  period  of  years.  They 
have  felt  that  they  did  not  get  enough  for  their  cattle  or  sheep  or 
hogs.  That  may  be  true,  for  the  producer  has  not  profited  as  well 
as  he  would  like.  But  the  records  of  the  packers  show  that  they 
have  not  gotten  it.  In  any  business  where  the  profit  has  proven  to 
be  so  small  I claim  it  is  dangerous  to  harress  that  business  with 
further  restrictions.  It  has  always  operated  on  a narrow  margin  of 
profit.  If  we  have  not  paid  enough  for  the  stock  to  satisfy  the  pro- 
ducer it  has  been  because  we  could  not  sell  the  stock  high  enough  to 
pay  any  more. 

The  Chairman.  It  is  a matter  that  affects  consumers  as  much  as 
producers.  The  question  is  if  there  are  evil  practices,  should  they  be 
corrected  ? 

Mr.  Nash.  I do  not  believe  there  are  evil  practices.  I think  the 
idea  that  they  exist  has  been  tremendously  exaggerated. 

Mr.  Purnell.  How  can  you  account  for  the  wide  difference  be- 
tween the  price  paid  to  the  producer  and  the  price  paid  by  the  con- 
sumer for  the  same  product  ? 

Mr.  Nash.  Why,  yes;  I think  I can. 

Mr.  Purnell.  Who  is  responsible  for  that  wide  margin  ? 

Mr.  Nash.  It  is  rather  a big  question,  but  the  biggest  part  of  that 
difference  is  that  the  consumptive  demand  is  restricted  to  a very 
small  percentage  of  the  product  handled.  The  concentrated  demand 
is  a very  small  portion.  I can  give  you  a little  illustration  of  why  the 
price  of  lamb  chops  is  so  high.  The  other  day  in  Cleveland  a butcher, 
who  has  a fancy  trade,  told  me  when  I was  in  his  shop : 

I am  selling  this  lamb  stew  for  a nickel  a pound.  I can  not  get  anybody  to  buy  it. 
Everybody  wants  lamb  chops. 

Now,  he  paid  more  than  a nickel  a pound  for  that  lamb-stew  meat, 
and  the  packer  in  fact  paid  more  than  a nickel  a pound  for  the  live 
lamb.  Yet  a certain  percentage  of  the  carcass,  quite  a large  per- 
centage of  the  carcass,  the  butcher  sells  for  a nickel  a pound,  and  that 
is  the  reason  he  has  to  get  60  or  70  or  80  cents  a pound  for  lamb 
chops.  There  are  only  a few  chops  in  a lamb,  while  there  is  a lot  of 
breast,  and  shank  and  shoulder  and  neck,  and  a butcher  catering  to 
a fancy  trade  can  not  sell  that  stuff  anywhere  near  what  he  paid  for 
46985—21 11 


162 


MEAT  PACKER. 


it.  The  spread  between  the  fancy  cuts  and  the  other  cuts  is  entire^ 
too  much. 

Mr.  Purnell.  Your  idea  is  that  it  is  because  of  the  extravagant 
taste  of  the  public  ? 

Mr.  Nash.  Yes,  sir.  And  I think  the  telephone  and  delivery  sys- 
tem affects  the  cost,  too.  We  do  not  go  to  market  any  more  and 
take  our  stuff  home,  but  there  is  a good  deal  of  marketing  over  the 
phone,  and  the  goods  must  be  delivered  at  considerable  expense;  and 

1 think  this  extravagant  demand  for  the  fancy  cuts,  leaving  little  or 
no  demand  for  the  other  cuts,  adds  very  greatly  to  the  price  of  lamb 
chops. 

The  Chairman.  Can  you  give  me  a fair  idea  of  what  should  be  the 
profit  of  the  retail  dealer;  what  is  a fair  profit? 

Mr.  Nash.  About  25  per  cent. 

The  Chairman.  About  what  percentage  is  charged  now  ? 

Mr.  Nash.  I have  never  seen  many  retailers  get  rich  in  the  meat 
business.  I do  not  think  they  average  much  more  than  25  per  cent 
over  cost. 

The  Chairman.  The  prices  charged  would  indicate  that  there  are 
great  profits  to  the  retailer. 

Mr.  Nash.  I think  the  retailers  have  probably  been  doing  better 
under  higher  prices  than  they  did  under  low  prices,  because  when  you 
figure  on  his  percentage  and  stuff  gets  to  be  worth  35  cents  or  40 
cents  wholesale,  and  he  adds  his  percentage,  I think  the  margin  is 
widened  out. 

The  Chairman.  And  evidently  a good  many  people  have  engaged 
in  profiteering. 

Mr.  Nash.  That  is  the  reason  for  the  wide  spread.  The  packer 
does  not  get  it.  We  do  not  get  it. 

The  Chairman.  About  what  is  the  spread  between  the  consumer’s, 
price  and  the  packer’s  price  ? 

Mr.  Nash.  Well,  that  varies  on  different  things.  We  know  what 
our  spread  is. 

Mr.  Ten  Eyck.  What  is  your  spread  ? 

Mr.  Nash.  Well,  we  did  not  make  any  money  last  year.  I am 
speaking  now  of  our  company;  we  did  nothing  last  year,  and  we  are 
behind  so  far  this  year. 

The  Chairman,  We  are  speaking  of  net  profits. 

Mr.  Nash.  We  made  no  net  profit  last  year  at  all,  or  a very,  very 
small  amount.  So  far  this  year  we  have  made  no  profit.  There  is  no 
spread;  we  are  handling  stuff  for  nothing.  In  normal  years  we  made 

2 cents  on  every  dollar  of  sales. 

The  Chairman.  What  is  the  spread  between  the  purchase  price  and 
the  selling  price  ? 

Mr.  Nash.  Well,  there  is  a certain  amount  in  each  animal  that  you 
buy  that  is  waste. 

The  Chairman.  If  you  pay  $10  for  live  weight — and  what  is  the 
average  of  the  dead  weight  ? 

Mr.  Nash.  Well,  that  is  a very  difficult  matter.  Take  hogs;  sup- 
pose we  are  paying  $10  a hundred  for  hogs  and  they  cost  dressed,  net, 
13  cents  a pound.  For  the  last  two  years  out  of  that  net  dressed 
carcass  at  13  cents  a pound  we  have  not  made  a penny. 

The  Chairman.  What  does  it  sell  for  on  an  average? 

Mr.  Nash.  It  just  sells  for  the  cost  of  doing  business. 


MEAT  PACKER. 


163 


The  Chairman.  About  how  much  is  that  ? 

Mr.  Nash.  I do  not  know  whether  I have  ever  just  figured  that  in 
the  spread. 

The  Chairman.  Well,  if  it  costs  10  cents  for  the  live  hog  there  is 
the  spread  between  10  cents  and  13  cents  to  cover  the  shrinkage. 

Mr.  Nash.  There  is  an  average  shrinkage  in  dressing  of  25  per  cent. 
That  leaves  75  per  cent  out  of  every  100  pounds  we  buy,  and  of  that 
75  pounds  there  is  about  15  per  cent  to  come  off  for  feet,  head,  and 
other  things,  leaving  about  60  per  cent  of  prime  cuts,  lard,  shoulders, 
etc.,  out  oi  the  original  100  pounds  for  the  live  hog. 

The  Chairman.  The  shrinkage  would  be  what  ? 

Mr.  Nash.  That  would  be  25  per  cent,  which  would  give  us  the 
dressed  carcass. 

The  Chairman.  That  is  $2.50  ? 

Mr.  Nash.  Less  the  cost  of  doing  business. 

The  Chairman.  The  other  50  cents  represents  the  cost  of  doing 
business. 

Mr.  Howard  R.  Smith.  You  will  find  that  that  is  not  quite  right. 
You  can  not  take  off  just  25  per  cent  for  the  killed  animal.  If  you 
divide  the  75  of  it  down  it  would  give  you  33  cents.  The  spread 
increases  as  you  go  up. 

The  Chairman.  I understood  you  to  say  that  that  represents 
shrinkage  and  cost  of  killing. 

Mr.  Nash.  Yes,  sir. 

The  Chairman.  What  is  the  cost  of  killing  ? 

Mr.  Nash.  That  will  vary.  Do  you  want  the  gross  spread  or  the 
net  spread  ? 

The  Chairman.  Either  way.  The  profit  represents  the  net 
spread.  What  is  the  gross  spread  ? 

Mr.  Smith.  What  they  try  to  make  is  15  per  cent  for  the  gross 
spread.  But  I think  the  gross  spread  does  not  run  over  around  12 
per  cent.  I think  everybody  in  the  packing  business  is  losing  money 
to-day.  You  have  to  have  15  per  cent  gross  spread  if  you  want  to 
make  any  money. 

Mr.  Nash.  I do  not  know  about  the  spreads,  but  I know  I am  not 
making  any  money. 

Mr.  Purnell.  What  do  you  charge  up  to  cost  of  production  ? 

Mr.  Nash.  Interest,  taxes,  depreciation,  labor;  anything  that  any- 
body else  charges  in  any  business. 

Mr.  Purnell.  Well,  the  fact  that  somebody  else  might  charge  up 
income  tax  may  not  be  warranted. 

Mr.  Nash.  Well,  we  do  not  charge  up  anything  that  is  not  proper 
and  that  other  businesses  do  not  charge. 

Mr.  Ten  Eyck.  Do  you  know  what  percentage  it  costs  you  on  the 
actual  cost  of  the  products  you  produce  to  operate  your  company! 
What  is  your  gross  percenatge  cost  ? 

Mr.  Nash.  Approximately  13  to  15  per  cent. 

Mr.  Ten  Eyck.  That  is  your  actual  cost  for  the  product,  from  13 
to  15  per  cent,  and  that  takes  care  of  the  entire  overhead,  cost  of 
operation  and  everything  else  ? 

Mr.  Nash.  Yes,  sir.  There  is  no  other  business  that  is  run  on  as 
small  a spread. 

Mr.  Purnell.  That  is  practically  the  same  amount  that  the  big 
packers  charge. 


164 


MEAT  PACKER. 


Mr.  Nash.  There  can  not  be  much  difference  if  they  pay  the  same 
price  for  the  live  animal. 

Mr.  Purnell.  But  they  can  do  business  at  a smaller  cost. 

Mr.  Nash.  I do  not  see  why. 

Mr.  Purnell.  They  have  a larger  concern  and  less  overhead. 

Mr.  Nash.  The  larger  the  concern  does  not  mean  the  less  the  over- 
head. 

Mr.  Purnell.  In  proportion  to  the  business,  I mean. 

Mr.  Nash.  I do  not  think  so.  I have  never  thought  that  the  big 
packer  can  do  business  as  cheaply  as  I can. 

Mr.  Purnell.  I do  not  know,  but  am  asking  for  information. 

Mr.  Nash.  I do  not  know  their  costs,  but  I figure  that  they  have 
a pretty  big  overhead. 

Mr.  McLaughlin  of  Nebraska.  On  what  basis  do  you  figure  that 
their  overhead  is  greater  than  yours  ? 

Mr.  Nash.  Well,  wherever  I come  in  contact  with  them  they  have 
big  plants,  where  they  are  not  doing  as  big  a business  as  we  are,  and 
they  have  big  selling  costs,  and  big  salaries,  and  we  do  not  pay  big 
salaries. 

Mr.  McLaughlin  of  Nebraska.  How  about  per  unit? 

Mr.  Nash.  We  are  not  asking  any  favors  of  the  big  packer  at  all. 
We  can  do  business  just  as  cheaply  as  he  can. 

The  Chairman.  What  is  the  name  of  your  firm? 

Mr.  Nash.  The  Cleveland  Provision  Co.,  Cleveland,  Ohio.  We 
handle  about  500,000  or  600,000  hogs  a year  and  about  75,000  cattle 
a year. 

Mr.  Purnell.  Do  you  have  any  trouble  getting  stock  when  the 
big  packers  are  in  the  market  and  care  to  buy  ? 

Mr.  Nash.  If  they  are  eager  to  buy  and  put  the  price  up,  we  get 
in  on  the  same  basis.  They  can  not  buy  them  all.  If  they  do  buy 
them  all  they  get  the  price  out  of  line  so  that  there  is  a loss  in  them. 
We  do  not  have  any  trouble  getting  our  cattle  and  hogs,  have  not 
had  in  the  25  years  I have  been  in  the  business;  with  this  one  excep- 
tion, of  this  gentleman  you  spoke  of  at  South  St.  Paul,  I have  never 
known  any  market  in  the  country  in  all  my  existence  as  a packer 
where  there  was  any  inability  on  the  part  of  an  independent  packer 
to  get  in.  That  is  the  only  market  I ever  heard  of  where  there  was 
not  a free  chance  to  everybody. 

Mr.  Kincheloe.  Mr.  Wells  did  not  testify  that  there  was  not  a 
free  chance  there  for  everybody.  I was  going  on  the  idea  that  there 
was  a free  chance  at  all  times.  My  understanding  was  that  Mr. 
Wells  said  there  was  absolutely  no  competition  on  that  market  ex- 
cept when  Hormel  came  down  there  and  bought  a lot  of  hogs  and 
they  put  the  price  up. 

Mr.  Nash.  I would  not  call  that  a fair  chance. 

Mr.  Kincheloe.  Why  do  you  call  that  not  a fair  chance? 

Mr.  Nash.  If  they  stuck  the  price  up  on  him  when  he  wanted  hogs 
and  jumped  them  down  when  he  went  out. 

Mr.  Kincheloe.  They  did  not  stick  the  price  up,  but  he  came  down 
and  raised  the  price  and  the  other  fellows  had  to  pay  more,  too. 
That  was  Mr.  Wells’s  idea. 

The  Chairman.  I would  like  to  know  what  is  meant  by  “1.  c.  1.” 

Mr.  Nash.  Less  than  carload  lots. 

The  Chairman.  Do  you  pay  the  full  carload  rate  ? 


MEAT  PACKER. 


165 


Mr.  Nash.  If  we  ship  a full  car  we  do. 

The  Chairman.  If  you  ship  a part  of  a car  how  is  it  then  ? 

Mr.  Nash.  L.  c.  1.  rate. 

The  Chairman.  What  is  that  ? 

Mr.  Nash.  Less  than  carload  lot  rates. 

The  Chairman.  To  what  extent  do  they  differ,  carload  and  less- 
than-carload  rates ; and  are  there  three  classes  ? 

Mr.  Nash.  No,  sir;  only  two. 

The  Chairman.  A carload  rate  and  a less-than-carload  rate  and 
a local  rate. 

Mr.  Nash.  No,  sir;  a local  rate  is  a less-than-carload  rate. 

The  Chairman.  The  local  rate  is  the  same  as  less-than-carload 
rate  ? 

Mr.  Nash.  There  are  two  kinds  of  rates,  carload  lots  and  less-than- 
carload  lots.  If  we  ship  goods  in  any  car  but  our  own,  or  in  any 
other  way  than  the  carload  minimum,  which  is  established,  we  have 
to  pay  1.  c.  1.  rates. 

The  Chairman.  What  is  the  requirement  as  to  a carload,  the 
minimum,  how  many  pounds  ? 

Mr.  Nash.  I think  about  16,000  pounds  in  these  peddler  cars. 

The  Chairman.  Is  the  rate  on  those  16,000  pounds  the  same  as  to 
an  outsider  shipping,  say,  200  pounds  ? 

Mr.  Nash.  No,  sir. 

The  Chairman.  Two  hundred  pounds  would  go  at  the  local  rate  ? 

Mr.  Nash.  Yes,  sir. 

The  Chairman.  We  have  three  rates  ? 

Mr.  Nash.  No,  sir;  the  local  rate  and  the  less-than-carload  rate 
is  the  same. 

The  Chairman.  I thought  you  said  there  were  three  rates. 

Mr.  Nash.  No,  sir;  I said  there  were  two  kinds  of  rates,  the  car- 
load rate  and  the  less-than-carload  rate. 

The  Chairman.  Sixteen  thousand  pounds  would  make  it  the  car- 
load rate  ? 

Mr.  Nash.  Yes,  sir. 

The  Chairman.  Is  it  the  same  as  on  a less  amount  ? 

Mr.  Nash.  No,  sir;  there  is  a minimum  weight  established  for 
certain  products. 

The  Chairman.  What  is  the  minimum  ? 

Mr.  Nash.  I do  not  remember  but  it  varies  on  certain  products. 

The  Chairman.  Will  you  insert  that  in  the  record  ? 

Mr.  Nash.  From  12,000  to  16,000  pounds  is  the  minimum.  If 
you  have  12,000  or  16,000  pounds  in  a car,  whatever  the  minimum 
is,  you  get  the  minimum  carload  rate.  But  if  you  have  8,000  pounds 
in  a car  you  pay  the  less-than-carload  rate. 

Mr.  Kincheloe.  Do  you  pay  less  in  proportion  ? 

Mr.  Nash.  No;  you  pay  the  less-than-carload  rate,  which  is 
higher  than  the  carload  rate. 

Mr.  Kincheloe.  The  L.  C.  L.  rate  is  higher? 

Mr.  Nash.  Yes,  sir. 

The  Chairman.  Your  carload  rate  is,  say,  10  cents? 

Mr.  Nash.  Yes,  sir. 

The  Chairman.  And  your  less  than  carload  rate  is  15  cents? 

Mr.  Nash.  Yes,  sir. 


166 


MEAT  PACKER. 


The  Chairman.  That  means  a certain  volume  of  business  "or  a 
certain  number  of  pounds  ? 

Mr.  Nash.  It  means  what  ? 

The  Chairman.  A certain  volume  of  freight.  You  would  have  to 
have  a certain  number  of  pounds  of  freight  in  order  for  them  to 
assign  to  you  a car. 

Mr.  Nash.  You  would  have  to  have  a certain  number  of  pounds 
to  get  the  carload  rate;  yes.  That  is,  a certain  minimum,  16,000 
pounds,  we  will  say.  You  have  to  have  that  minimum. 

The  Chairman.  Do  we  understand  that  the  rate  is  the  same  to  all 
persons,  whether  large  or  small  in  volume  ? 

Mr.  Nash.  It  is  the  same  to  all.  If  you  have  less  than  carload  in 
weight  everybody  pays  the  less-than-carload  rate. 

The  Chairman.  You  have  to  have  a certain  amount  of  business 
in  order  to  have  a car  assigned  to  you,  don’t  you  ? 

Mr.  Nash.  No;  I do  not  think  so. 

Mr.  Kincheloe.  The  smaller  the  amount  of  freight  the  more  you 
pay  in  proportion  ? 

Mr.  Nash.  There  are  only  two  classes  of  rates. 

Mr.  Kincheloe.  Suppose  the  minimum  is  12,000  pounds,  and  you 
have  that  much,  you  get  the  carload  rate  ? 

Mr.  Nash.  Yes,  sir. 

Mr.  Kincheloe.  Suppose  I want  to  ship  in  that  car  only  8,000 
pounds. 

Mr.  Nash.  All  right. 

Mr.  Kincheloe.  And  suppose  you  had  some  stuff  you  wanted  to 
ship,  say  5,000  pounds,  do  you  get  it  as  cheap  as  I do  ? 

Mr.  Nash.  In  the  same  car? 

Mr.  Kincheloe.  I do  not  suppose  we  would  ship  it  in  the  same  car. 

Mr.  Nash.  If  you  ship  less  than  16,000  pounds  and  I ship  less  than 
16,000  pounds  it  makes  no  difference  how  we  ship  it  we  both  pay 
the  same  rate. 

Mr.  Kincheloe.  Regardless  of  the  amount  shipped? 

Mr.  Creigh.  It  is  the  same  rate  per  hundred  pounds. 

Mr.  Kincheloe.  It  is  the  same  rate  per  hundred  pounds  for  less 
than  a carload  ? 

Mr.  Nash.  Yes,  sir.  There  is  no  difference  between  shipping  500 
pounds  and  100  pounds. 

Mr.  Kincheloe.  It  is  the  same  rate  per  pound  ? 

Mr.  Nash.  Yes,  sir. 

The  Chairman.  If  you  load  a car  with  12,000  pounds  do  you  pay 
the  rate  to  destination  ? 

Mr.  Nash.  Yes,  sir. 

The  Chairman.  Will  they  stop  the  car  for  you  and  let  you  unload 
it  along  the  line  ? 

Mr.  Nash.  Yes,  sir;  they  do  give  those  privileges  and  charge  so 
much  extra.  You  pay  a certain  rate  for  the  stop-off  privilege,  say,  at 
two  or  three  towns  en  route.  It  is  so  much  for  each  stop. 

The  Chairman.  Can  you  supply  the  record  with  that  rate  ? 

Mr.  Nash.  No,  sir;  I can  not. 

The  Chairman.  What  is  the  charge  for  stopping,  about  what  ? It 
used  to  be  $2  for  each  stop. 

Mr.  Nash.  It  used  to  be  that  but  it  is  more  now.  If  my  memory 
is  correct,  it  is  at  least  $5  a stop. 


MEAT  PACKER. 


167 


Mr.  Clague.  Is  that  regulated  by  the  Interstate  Commerce  Com- 
mission ? 

Mr.  Nash.  I assume  so.  It  is  a railroad  charge. 

The  Chairman.  Well,  really  where  is  the  discrimination  if  there 
is  an  open  door  in  the  matter  of  peddler  cars  ? 

Mr.  Nash.  I can  not  see  any  basis  for  the  charge  of  the  wholesale 
grocers  that  there  is  discrimination.  The  wholesale  grocer  claims  the 
packer  has  an  ability  to  ship  various  kinds  of  goods  to  his  branch 
houses  in  refrigerator  cars. 

The  Chairman.  The  real  advantage  is  in  owning  the  car  ? 

Mr.  Nash.  As  to  the  ownership  of  the  cars,  if  it  gives  the  packer  any 
privilege  or  advantage,  it  was  only  done,  as  I said  before,  because  we 
could  not  get  the  railroads  to  build  them.  We  needed  them  in  our 
branch-house  business  and  fresh-meat  business  and  had  to  have  them. 

The  Chairman.  There  are  advantages  in  the  special  car. 

Mr.  Nash.  There  are  advantages  that  you  have  provided  yourself. 

The  Chairman.  The  railroad  would  not  supply  a man  with  a car 
to  ship  a few  hundred  pounds  ? 

Mr.  Nash.  No;  he  would  have  to  get  up  a combination  to  fill  the 
car. 

The  Chairman.  Any  combination  in  shipment  in  any  business 
could  get  a car? 

Mr.  Nash.  I do  not  know  Avhether  the  cars  exist  in  such  numbers 
that  they  could  give  them  to  them. 

The  Chairman.  If  they  do,  they  would  be  supplied  with  a car  the 
same  as  a packer. 

Mr.  Nash.  Certainly. 

The  Chairman.  The  trouble  is  that  others  can  not  get  together  and 
supply  the  volume  ? 

Mr.  Nash.  The  trouble  is  that  if  a wholesale  grocer  wants  a re- 
frigerator car,  he  has  not  provided  himself  with  it.  Why  didn’t  he 
put  his  money  in  them  like  we  did.  If  he  wants  refrigerator  cars,  why 
doesn’t  he  buy  them  ? 

The  Chairman.  What  is  the  difference  in  rate  between  perishable 
and  non-perishable  goods  ? 

Mr.  Nash.  The  rate  on  fertilizer  is  low,  that  being  a low-priced 
article. 

The  Chairman.  We  are  talking  about  articles  of  any  kind. 

Mr.  Nash.  Well,  I do  not  know.  Fresh  meat  goes  at  one  rate  and 
canned  meat  goes  at  another. 

The  Chairman.  What  is  the  rate  on  fresh  meat? 

Mr.  Nash.  It  is  high. 

The  Chairman.  Which  is  the  higher  rate,  on  meats  or  fruits  ? 

Mr.  Nash.  I do  not  know,  Mr.  Chairman,  I should  think  that  the 
fresh-meat  rate  is  higher. 

Mr.  Kincheloe.  You  ice  your  own  cars,  of  course? 

Mr.  Nash.  Yes,  sir;  at  initial  points. 

Mr.  Kincheloe.  You  use  railroad  cars,  too? 

Mr.  Nash.  Yes,  sir. 

Mr.  Kincheloe.  The  railroad  has  nothing  to  do  with  the  icing  of 
cars  ? 

Mr.  Nash.  Not  at  our  sidings,  but  at  other  points.  We  use  our 
own  cars. 


168 


MEAT  PACKER. 


Mr.  Kincheloe.  Of  course  you  carry  nothing  but  your  own  stuff 
in  your  own  cars  ? 

Mr.  Nash.  No,  sir. 

Mr.  Kincheloe.  Who  ices  cars  along  the  road  ? 

Mr.  Nash.  The  railroads  sometimes  and  sometimes  icing  companies 
for  railroad  account. 

The  Chairman.  Do  you  ice  your  own  cars  ? 

Mr.  Nash.  At  the  point  of  origin;  yes. 

The  Chairman.  Are  you  about  through  now? 

Mr.  Nash.  Yes,  sir. 

Mr.  Voigt.  Just  one  question  before  you  finish:  On  this  point  as 
to  whether  there  is  actual  competition  between  the  packers  on  the 
markets,  in  part  2 of  the  Federal  Trade  Commission’s  report,  on  page 
76,  there  is  a copy  of  a letter  dated  Denver,  October  19,  1915,  ad- 
dressed to  Mr.  J.  O.  Armour,  Chicago,  by  one  of  his  nephews.  It 
says: 

My  Dear  Uncle  Ogden — 

I am  just  going  to  read  a part  of  this  letter — 

I can  not  tell  you  how  surprised  I was  in  going  over  the  plant  here.  Of  all  the  plants 
we  have  this  one  certainly  needs  our  first  attention.  In  my  opinion  the  test  part  of 
it  is  as  bad  as  the  worst  part  of  any  of  our  other  plants.  Swift’s  plant,  from  what  I 
hear  and  from  the  little  I saw  of  it,  is  far  ahead  of  ours,  both  as  to  size  and  condition. 
Of  course  as  you  know  eA^erything  here  is  done  on  a 50-50  basis,  and  with  the  facilities 
we  ha\'e  it  is  almost  impossible  to  keep  up  this  ratio. 

That  letter  is  signed  by  Philip  D.  Armour,  3d.  What  do  you 
understand  he  meant  in  that  letter  when  he  said  everything  was  done 
in  Denver  on  a 50-50  basis  ? 

Mr.  Nash.  There  are  only  two  plants  there,  his  and  that  of  Swift 
& Co.,  and  I assume  they  took  about  50  per  cent  each  of  the  receipts. 

Mr.  Voigt.  Do  you  think  there  is  any  agreement  between  Swift 
and  Armour  for  a 50-50  basis  ? 

Mr.  Nash.  I do  not  know.  If  it  was  not  an  actual  agreement  I do 
not  see  how  you  could  have  other  than  a working  agreement. 

Mr.  Voigt.  It  says  that  everything  there  was  done  on  a 50-50 
basis. 

Mr.  Nash.  I do  not  see  how  you  could  go  further  than  the  receipts 
of  livestock  and  hogs.  I do  not  see  how  they  could  go  further  than 
that. 

Mr.  Voigt.  That  is  what  I mean.  You  think  it  means  that  there 
is  an  understanding  between  those  two  packers  at  that  point  that 
each  shall  buy  50  per  cent  of  the  receipts  of  live  stock  at  Denver  ? 

Mr.  Nash.  Yes;  I think  that  is  what  it  means. 

Mr.  Voigt.  Do  you  consider  that  a proper  agreement  for  two 
packers  to  make  ? 

Mr.  Nash.  I do  not  think  it  a bad  idea. 

Mr.  Voigt.  I think  it  a good  idea  as  far  as  the  two  packers  them- 
selves are  concerned,  but  I am  figuring  now  on  the  man  who  sells 
cattle  in  that  market.  Is  it  a fair  deal  to  him? 

Mr.  Nash.  Yes;  I think  so.  Swift  and  Armour 

Mr.  Voigt  (interposing).  Let  me  follow  that  up  a little  further 
before  you  answer:  Suppose  there  are  a thousand  cattle  out  here  on 
the  street  that  are  for  sale,  and  you  and  I are  the  only  buyers,  and 
you  and  I would  agree  that  each  will  take  one-half  of  those  cattle. 
Aren’t  we  then  able  to  fix  the  exact  price  which  we  are  going  to  pay  ? 


MEAT  PACKER. 


169 


Mr.  Nash.  Yes;  you  can  fix  the  approximate  price,  I think. 

Mr.  Voigt.  Is  there  any  competition  between  you  and  me  for  the 
purchase  of  those  cattle,  in  that  event  ? 

Mr.  Nash.  Not  very  much. 

Mr.  Voigt.  Then  you  will  admit  that  under  this  sort  of  an  agree- 
ment there  is  not  free  and  open  competition  for  the  purchase  of 
live  stock  ? 

Mr.  Nash.  No;  I would  not  admit  that,  because  there  are  other 
ways  of  selling  cattle  from  the  Denver  market  than  to  Armour  or 
Swift.  Shippers  may  be  in  there  and  buy  them  and  ship  them  to 
other  markets. 

Mr.  Voigt.  You  know  as  a matter  of  fact  that  if  Armour  and  Swift 
suddenly  stopped  buying  in  that  market  that  the  receipts  in  that 
market  could  not  be  sold  ? 

Mr.  Nash.  No.  On  the  other  hand,  if  Armour  and  Swift  paid 
unfair  prices  at  that  market,  or  unusually  depressed  the  market, 
those  fellows  would  not  ship  their  cattle  to  that  market,  because 
there  are  plenty  of  other  markets  to  ship  them  to. 

Mr.  Voigt.  Let  us  assume  that  that  is  so,  but  that  at  another 
market  they  encounter  the  same  sort  of  an  agreement,  what  then  ? 

Mr.  Nash.  Well,  I do  not  think  that  outside  of  one  or  two  of  the 
other  markets  there  are  such  opportunities. 

Mr.  Voigt.  You  evidently  have  not  studied  the  report  of  the 
Federal  Trade  Commission. 

Mr.  Nash.  Oh,  yes,  I have. 

Mr.  Voigt.  Well,  have  you  noticed  in  the  report  of  the  Federal 
Trade  Commission  that  the  packers  at  Chicago  report  to  each  other 
every  day  or  every  week  as  to  the  amounts  of  their  purchases  ? 

Mr.  Nash.  No;  I do  not  absolutely  remember  that,  but  even  if 
they  did  I do  not  see  anything  in  that  that  amounts  to  discrimination. 

Mr.  Voigt.  Do  you  in  your  business  report  your  purchases  and 
sales  to  your  competitors  or  to  anybody  ? 

Mr.  Nash.  No;  but  they  get  them  from  the  stockyards  company. 

Mr.  Voigt.  No;  but  in  this  case  it  is  said  they  report  to  each  other. 

Mr.  Nash.  They  can  get  that  information  from  the  public  records. 
It  does  not  make  any  difference  whether  they  report  them  or  not,  it 
is  a perfectly  open  and  public  business. 

Mr.  Voigt.  Do  you  know  of  any  reason  why  the  Big  Five  packers 
at  Chicago  should  tell  each  other  about  their  business  ? 

Mr.  Nash.  No;  I do  not. 

Mr.  Voigt.  And  if  they  do  it  there  must  be  some  cause  or  reason 
for  it. 

Mr.  Nash.  I do  not  see  how  it  is  possible  for  five  corporations 
doing  the  same  business  and  talking  more  or  less  about  their  busi- 
ness without  mentioning  some  things  of  this  kind.  What  they  do 
when  they  talk  about  their  business  I do  not  know,  but  they  must 
be  intimately  related  when  they  have  the  same  dealings  every  day, 
that  is,  the  same  class  of  product  and  the  same  conditions  to  meet, 
and  they  must  talk  about  conditions. 

Mr.  Creigh.  Does  not  your  buyer  in  Chicago  every  day  know  from 
the  daily  papers  and  otherwise  what  is  paid  there  ? 

Mr.  Nash.  Yes. 

Mr.  Voigt.  That  being  true,  why  was  it  necessary  for  one  packer 
to  go  to  the  trouble  to  notify  the  other  four  packers  just  what  he 
has  paid  all  over  the  country  on  any  particular  day  ? 


170 


MEAT  PACKER. 


Mr.  Nash.  I do  not  see  quite  the  idea  in  asking  me  what  I know 
about  somebody  else’s  business,  because  I do  not  know.  It  is  none 
of  my  business. 

Mr.  Voigt.  I am  asking  why  you  think  they  do  it. 

Mr.  Nash.  Why,  I can  not  imagine.  They  never  asked  me.  I do 
know  this:  When  I said  there  is  competition  in  the  business,  and 
there  may  be  one  or  two  yards  where  I do  not  think  there  is  any 
other  practical  way  to  divide  up  such  small  receipts,  if  there  are  two 
small  packers  or  plants,  and  those  are  comparatively  small  plants, 
Armour’s  and  Swift’s,  at  Denver,  I think,  and  the  market  is  very 
limited ; but  I think  if  you  will  ask  the  shippers  to  that  market  they 
will  tell  you  that  Armour  and  Swift  have  paid  fair  prices  as  com- 
pared with  the  prices  paid  at  other  markets. 

Mr.  Voigt.  Yes;  because  if  the  same  condition  of  50-50  exists  at 
another  market  the  prices  would  be  about  the  same. 

Mr.  Nash.  Do  you  claim  that  all  markets  are  manipulated  in  this 
business  ? 

Mr.  Voigt.  Absolutely. 

Mr.  Nash.  I think  you  are  wrong. 

Mr.  Voigt.  I base  my  conclusion  on  the  report  of  the  Federal 
Trade  Commission.  There  has  never  been  anybody  before  this  com- 
mittee that  denied  that  the  facts  and  figures  furnished  by  the  Fed- 
eral Trade  Commission  were  true. 

Mr.  Nash.  Well. 

Mr.  Voigt.  If  you  found  that  they  had  a 50-50  agreement  in  one 
market  wouldn’t  it  lead  you  to  suspect  that  they  had  a similar  agree- 
ment in  other  markets  ? 

Mr.  Nash.  Possibly  as  to  the  percentage  they  claimed  they  did 
buy,  but  they  do  not  control  the  markets  when  they  get  there.  The 
markets  are  so  big  that  independent  buyers  and  shippers  for  buyers 
have  some  influence.  I do  not  care  what  the  big  fellow  does  between 
himself  and  his  colleague,  whether  he  says,  “ I will  take  25  and  you 
take  25,  so  long  as  I get  mine.” 

Mr.  Purnell.  But  if  one  takes  50  and  the  other  50,  how  much  is 
left  for  you  ? 

Mr.  Nash.  They  can  not  do  that,  except  in  a small  market  where 
they  are  the  whole  thing — probably  like  Denver. 

Mr.  Kinciieloe.  While  that  might  not  affect  you  it  would  affect 
the  producer. 

Mr.  Nash.  I do  not  think  so. 

Mr.  Kincheloe.  If  you  and  I agree  to  take  those  cattle  50-50,  and 
had  no  competitors  here,  and  these  gentlemen  sitting  around  the 
table  here  were  producers,  do  you  think  it  would  help  them,  or  that  it 
would  help  the  consumers  ? 

Mr.  Nash.  I think  the  packers  generally  have  paid  live-stock  pro- 
ducers all  they  can. 

Mr.  Kincheloe.  I am  not  talking  about  that.  Say  you  and  I agree 
to  take  50-50  of  the  cattle  at  a market,  do  you  mean  to  say  that  that 
does  not  hurt  the  producer  at  all  ? 

Mr.  Nash.  No,  sir. 

Mr.  Kincheloe.  It  does  not  produce  a market  ? 

Mr.  Nash.  No. 

Mr.  Kincheloe.  Well,  you  and  I have  a whole  lot  different  ideas 
about  markets. 


MEAT  PACKER. 


171 


Mr.  Purnell.  Assume  that  at  Denver  Swift  and  Armour  had  this 
50-50  arrangement,  how  far  could  an  independent  packer  go  to  break 
into  that  arrangement  and  hold  the  prices  up  ? 

Mr.  Nash.  At  that  point  ? 

Mr.  Purnell.  Yes.  How  much  influence  does  the  independent 
buyer  have  against  that  particular  arrangement  if  it  is  true  at  Denver  ? 

Mr.  Nash.  Well,  here  is  what  we  do  in  buying  hogs  and  cattle: 
We  have  every  market  that  is  reachable  by  us  report  to  us  every 
morning.  It  is  inconceivable  that  Swift  and  Armour  could  stand  up 
in  Denver  and  rob  the  cattle  man  or  the  hog  man.  If  hogs  or  cattle 
are  too  cheap  in  Denver,  and  if  they  have  one  live  commission  man 
in  that  town,  he  can  wire  out  to  people,  to  independent  buyers,  and 
get  that  market,  very  easily.  We  are  always  looking  for  snaps,  just 
like  anybody  else. 

Mr.  Voigt.  Do  you  know  that  those  packers  have  a system  of 
wiring  on,  as  they  call  it?  For  instance,  if  you  take  a shipment  of 
nattle  to  a market  and  are  not  satisfied  with  the  prices  offered  and 
ship  them,  say  to  Omaha,  do  you  know  that  there  is  somebody  at 
Denver  that  wires  on  to  Omaha,  to  the  packers  in  Omaha  and  tells 
them  the  prices  they  had  offered  you  there  ? 

Mr.  Nash.  I do  not  know.  A man  can  not  get  any  more  than  the 
price  on  the  market  anyhow. 

Mr.  Voigt.  You  say  if  he  is  not  offered  enough  at  the  Denver 
market  he  can  go  somewhere  else  ? 

Mr.  Nash.  Yes. 

Mr.  Voigt.  And  when  he  gets  somewhere  else  suppose  he  finds  the 
packers  have  the  price  that  was  bid  at  the  other  market  at  Denver, 
and  they  will  not  bid  over  that  figure  ? 

Mr.  Nash.  Oh,  no.  You  are  talking  about  some  alleged  practices 
of  the  Big  Five.  That  does  not  cover  the  packing  industry. 

Mr.  Voigt.  There  is  no  allegation  about  it.  The  telegrams  covering 
same  are  in  the  report. 

Mr.  Nash.  Well,  all  right.  There  are  plenty  of  independent  buy- 
ers of  cattle.  The  big  packers  do  not  control  any  live-stock  market. 

Mr.  Voigt.  Let  us  see  about  that.  According  to  the  report  of  the 
Federal  Trade  Commission  the  Big  Five  packers  control  about  85  or 
86  per  cent  of  the  live  stock  handled  in  interstate  commerce.  That 
leaves  to  you  small  packers  the  small  amount  of  14  per  cent. 

Mr.  Nash.  That  is  untrue. 

Mr.  Voigt.  That  is  based  on  actual  figures. 

Mr.  Nash.  Oh,  no;  I think  that  is  a mistake. 

Mr.  Kincheloe.  How  do  you  know  it  is  untrue? 

Mr.  Nash.  Because  my  impression  is  that  it  is  about  55  per  cent 
of  the  pork  business  and  about  75  per  cent  of  the  beef  business. 

Mr.  Voigt.  You  have  never  assembled  any  figures,  have  you? 

Mr.  Nash.  No,  but  I think  these  are  even  the  figures  shown  in  the 
report  of  the  Federal  Trade  Commission.  There  have  been  some 
figures  made  by  a Government  department. 

Mr.  Voigt.  You  differ  from  the  figures  offered  by  the  Big  Five 
packers’  representatives.  The  representatives  of  the  Big  Five  pack- 
ers admitted  that  to  be  true  when  they  were  here  before. 

Mr.  Hormel.  Pardon  my  interruption,  but  we  kill  every  year 
200,000  hogs  that  do  not  move  out  of  Minnesota. 

Mr.  Voigt.  I am  talking  about  interstate  slaughterers  of  meat 
animals. 


172 


MEAT  PACKER. 


Mr.  Nash.  I am  talking  about  the  total  business. 

Mr.  Voigt.  The  fact  that  a butcher  in  a small  country  town  buys 
a hog  and  butchers  that  hog  does  not  have  any  immediate  effect  on 
interstate  commerce. 

Mr.  Nash.  But  there  are  plenty  of  other  men  who  do  not  kill  one 
hog  but  hundreds  of  hogs  a week. 

Mr.  Voigt.  What  I am  trying  to  get  at  is,  if  you  small  packers  only 
control  14  per  cent  of  the  interstate  business,  how  are  you  going  to 
absorb  this  vast  quantity  of  material  that  comes  on  the  market.  You 
can  not  do  it. 

Mr.  Nash.  Well,  the  independent  buyers  are  quite  a factor  in  the 
markets  from  day  to  day.  I do  not  want  yoii  to  think  that  they  are 
not,  and  if  there  is  any  point  in  this  country  where  the  hog  producer 
or  the  cattle  producer  is  being  robbed  there  are  plenty  of  independent 
packers  ready  to  jump  in  and  equalize  the  market  in  any  market  in 
this  country.  There  is  nobody  getting  away  with  any  low  stuff  in  any 
quantity. 

Mr.  Voigt.  Why,  my  dear  sir,  if  you  handle  only  14  per  cent  of 
that  business,  it  is  impossible  for  you  to  absorb  the  other  86  per  cent. 

Mr.  Nash.  Yes;  but  it  is  not  fair  to  take  the  interstate  business 
and  leave  out  all  the  intrastate  business.  That  is  no t a fair  comparison . 
Of  the  total  business  of  the  country  according  to  the  figures  I have 
seen  many  times  the  independent  packers  have  pretty  nearly  50  per 
cent  of  the  total  pork  business  in  the  United  States.  The  percentage 
of  the  big  packers  in  the  beef  business  is  around  70  per  cent.  But  in 
pork  the  independent  packers  do  about  50  per  cent  of  the  total 
business. 

Mr.  Purnell.  That  is  intrastate  and  interstate  ? 

Mr.  Nash.  Of  all  business. 

The  Chairman.  Without  objection  we  will  have  these  tables 
printed  in  the  record. 


Estimated  number  and  percentage  of  meat  animals  by  kinds  in  principal  producing  States 
and  in  the  United  States,  Jan.  1,  1918. 

[Supplied  by  the  Bureau  of  Crop  Estimates,  Department  of  Agriculture.] 


States. 

Cattle  and 
calves  other 
than  dairy 
cows. 

States. 

Sheep  and 
lambs. 

States. 

Hogs. 

Num- 
ber in 
thou- 
sands. 

Per 

cent. 

Num- 
ber in 
thou- 
sands. 

1 

Per 

cent. 

Num- 
ber in 
thou- 
sands. 

Per 

cent. 

United  States j 

Texas 

Iowa 

Nebraska 

Kansas 

Missouri 

California 

Minnesota 

South  Dakota 

Oklahoma 

Wisconsin 

Illinois 

Total  11  prin- 
cipal States . . 
All  other  States . . 

43,546 

100.0 

United  States . . . 

Wyoming 

Idaho 

New  Mexico 

Ohio 

Montana 

California 

Oregon 

Utah 

Texas 

Colorado 

Michigan 

Total  11  prin- 
cipal States . . . 
All  other  States . 

48,  900 

100. 0 

United  States . . . 

Iowa 

Illinois 

Missouri 

Nebraska 

Indiana 

Ohio 

Texas 

Georgia 

Kansas 

Minnesota 

Alabama 

Total  11  prin- 
cipal States . . . 
All  other  States . 

71, 374 

100.0 

4,666 

2,919 

2,803 

2,354 

1,782 

1,701 

1,  540 

1,  483 
1,404 
1, 394 
1,314 

10.7 

6.7 

6.4 

5.4 

4. 1 
3.9 

3.5 
3.4 

3.2 
3.2 
3.0 

4,100 
3,202 
3, 135 
3,081 
3,045 
2,776 
2,448 
2,340 
2, 188 
2,086 
1,826 

8.4 

6.5 

6.4 

6.3 
6.2 
5.8 

5.7 

4.8 

4.5 

4.3 

3.9 

10, 307 
5,111 
4,708 
4,200 
4,168 
3,  774 
3,068 
2,766 
2,560 
2,241 
2,128 

14.4 

7.7 

1 6.6 

i 5.9 

5.  8 
5.3 
! 4.3 

! 3.9 

3.6 
3.1 
3.0 

23,  360 
20,  186 

53.5 

46.5 

30, 337 
18,  563 

62.0 

38.0 

45, 031 
26,  343 

63.1 

36.9 

Stockyards  gross  receipts  of  live  stock  by  kinds,  1916. 


MEAT  PACKER. 


Controlling  interests. 

Prince- Armour. 

Morris. 

Armour. 

Morris,  Swift,  Armour. 
Swift  and.  Armour. 

Do. 

Do. 

Do. 

Swift  and  Morris. 

Independent. 

New  York  Central  R.  R. 

Independent. 

Morris. 

Armour. 

Cudahy. 

Indenendent. 

Mot  ri ; Shriver. 

Independent. 

Armour-  Allerton . 

Swift. 

Sheep. 

Per 

cent. 

83$5888iS838$83S$&S88S3S 

o -----  • 

5 

S8 

Number. 

SSllssSilalSlSiSlllS 

^HCO 

17,  265,  884 

Hogs. 

Per 

cent. 

38s35S35588SSSs$823Sg2£888 

h cd  i>  ci  to  >o  i-5 10  to  co  c4  r4  c4  r4  h <n'  c4  oi  <4 

<N 

91. 00 

Number. 

9,188,224 
2,978,933 
3, 116,  820 
3, 057, 414 
968, 024 
2, 674, 547 
2, 131, 113 
466, 653 
2, 198,  751 
2,575,611 

1, 692,  583 
1,  260, 118 
759, 603 
1, 075,  986 
572,  675 
738, 675 
1, 002,  617 
975,  586 
877,  749 
535, 692 

§ 

§ 

sr 

Calves. 

Per 

cent. 

; jtOtO  HH  '.uJfiNO  ’(NCiiC 

75.89 

Number. 

s§ : isiiis  isiii  iasess 

II  i igpsfs  ifss's  loss's- 

2, 084, 174 

Cattle. 

Per 

cent. 

M^CROOCOMcCMCOdNHHHHHH  • * • 

89. 13 

Number. 

SlllSIsSSIpSigiisgsti 

faWi¥l¥l¥s¥l¥fsYs§s 

- 

13, 094,  980 

T 


Interstate  slaughterers , 1916 — Number  of  animals  slaughtered,  by  kinds,  by  the  5 largest  slaughterers  and  by  all  other  interstate  slaughterers  with  'per- 
centages of  total. 


174 


MEAT  PACKER. 


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MEAT  PACKER. 


175 


(Thereupon,  at  12  o’clock  and  55  minutes  p.  m.,  the  committee 
recessed  until  2.15  o’clock  p.  m.) 

AFTER  RECESS. 

The  committee  reconvened  at  2.15  o’clock  p.  m.,  pursuant  to 
recess,  Hon.  Gilbert  N.  Haugen  (chairman)  presiding. 

The  Chairman.  The  committee  will  come  to  order.  Are  you  ready 
to  go  on,  Mr.  Lightfoot  ? 

Mr.  Lightfoot.  Yes,  sir.  I have  several  witnesses  here.  I will 
ask  you  to  first  hear  Mr.  Smith. 

The  Chairman.  Has  the  witness  that  was  on  the  stand  this 
morning  when  we  adjourned  completed  his  statement? 

Mr.  Lightfoot.  Yes. 

The  Chairman.  We  will  hear  from  you,  Mr.  Smith. 

STATEMENT  OF  HOWARD  R.  SMITH,  OF  THE  JONES  & LAMB 
CO.,  BALTIMORE,  MD. 

The  Chairman.  Will  you  kindly  give  your  name. 

Mr.  Smith.  Howard  R.  Smith. 

The  Chairman.  And  what  is  your  connection  ? 

Mr.  Smith.  Why,  I am  one  of  the  largest  stockholders  in  the  Jones 
& Lamb  Co.  I was  president  of  that  company  up  to  the  15th  of 
March  this  year.  I am  not  now  actively  connected  with  the  company. 

The  Chairman.  And  where  is  it  located? 

Mr.  Smith.  Baltimore,  Md. 

The  Chairman.  Proceed,  Mr.  Smith. 

Mr.  Smith.  Gentlemen,  I just  want  to  state,  as  an  independent 
packer,  that  we  are  bitterly  opposed  to  any  legislation  whatever 
regarding  the  handling  of  the  packing  business.  Now  most  of  this 
artillery  seems  to  be  fired  at  the  big  packer,  and  I don’t  think  it  is 
out  of  order  for  me  to  just  state  briefly  my  experience  in  the  meat 
business.  I have  been  in  the  meat  packing  business  31  years.  The 
first  two  years  I was  there  I was  connected  with  a local  firm,  in 
Baltimore,  and  from  all  reports  I had  heard,  all  the  money  in  the  world 
was  connected  with  the  big  packers,  so  I thought  it  was  a good 
idea  to  get  tied  up  with  one  of  them,  and  I did,  so  I was  then  associa- 
ted with  Morris  & Co.  for  13  years.  I saw  that  I had  considerably 
better  opportunities  with  a smaller  concern  than  with  a big  concern, 
and  I couldn’t  see  where  they  in  any  sense  of  the  word  were  monop- 
olizing the  industry. 

In  1906  I formed  the  Jones  & Lamb  Co.,  in  Baltimore.  I started 
it  with  practically  a shoe-string,  and  we  got  along  very  successfully, 
doing  a business  of  about  from  $8,000,000  to  $10,000,000  a year. 

Now  there  was  a great  deal  of  talk  here  this  morning  about  the 
competition  in  buying  and  selling.  I just  want  to  state  that  we  have 
no  trouble  in  buying  all  the  stock  we  want,  and  we  can  buy  just  as 
cheap  as  the  large  or  the  small  packers,  and  I might  say  the  same 
thing  applies  to  the  selling. 

And  as  far  as  the  selling  part  goes,  I would  like  to  further  state  that, 
as  far  as  the  larger  packer  is  concerned,  for  the  same  quality  goods 
we  can  sell  them  to  a better  profit  than  the  large  packer.  So  it 


176 


MEAT  PACKER. 


doesn’t  look  to  me  that  bug-a-boo  of  the  packing  industry — which  is 
the  large  packers — is  putting  anybody  out  of  business. 

Now,  as  regards  the  selling  of  the  product.  This  is  a rather  unusual 
business.  The  cost  of  it- — and  it  may  sound  singular  to  the  people 
who  are  not  in  the  business — but  the  cost  of  it  doesn’t  have  anything 
to  do  with  the  selling  price.  In  other  words,  you  pay  so  much  for  the 
live  animal,  and  in  plain  words,  you  sell  it  for  what  you  can  get  for  it. 
There  is  no  relative  cost  which  you  can  put  on  any  cut  of  meat  and 
say  that  you  are  going  to  get  that  for  it,  because  you  can  not. 

Now,  the  question  came  up  during  the  investigation  this  morning 
about  refrigerator  cars.  I would  like  to  state  that  we  don’t  own  any 
refrigerator  cars.  We  have,  of  course,  not  an  extensive  business,  but 
we  have  called  on  the  railroads  for  as  many  as  four  or  five  in  one  day. 
I don’t  know  of  any  time  where  we  failed  to  get  them.  So  I don’t 
see  where  the  big  packer  has  so  much  on  us  in  that  respect. 

Another  objection  I have  to  a commission  regulating  the  packing 
industry  is  this : It  refers  in  this  bill  to  their  having  the  power  to  cause 
us  to  keep  our  accounts  and  records  in  such  and  such  a way,  and  I want 
to  say  this,  that  in  a business  of  our  size — in  fact  with  most  of  the 
small  packers— it  is  not  necessary  to  have  the  detailed  reports  and 
the  amount  of  details  that,  for  instance,  a firm  like  Armour  & Co.  have. 
It  is  not  necessary.  They  would  crowd  a whole  lot  of  stuff  on  us  of 
that  nature,  and  it  would  absolutely  swamp  us  with  details. 

Another  thing  about  a commission  of  this  character  is  this:  When 
the  Federal  Trade  Commission  was  investigating  the  packing  indus- 
try they  came  to  our  place  in  Baltimore;  two  very  nice  affable  gen- 
tlemen came  to  our  place  from  the  Federal  Trade  Commission.  They 
there  about  three  weeks.  They  really  turned  our  office  upside  down. 
I didn’t  know  whether  they  were  hunting  for  mice  or  not;  they  got 
into  so  many  things  in  our  old  records,  but  I know  it  detained  us  in 
getting  out  our  yearly  statement  for  about  five  weeks.  So,  remember- 
ing things  of  that  character,  I don’t  care  about  any  more  commissions 
calling  on  us  if  we  can  help  it. 

So  far  as  we  are  concerned,  we  see  no  use  for  a commission  of  this 
kind  and,  furthermore,  I think  it  would  be  very  harmful  to  the  smaller 
packer,  at  least. 

Of  course  I am  not  here  defending  the  large  packer.  I am  speaking 
for  the  smaller  packers,  of  which  I am  one. 

Mr.  Jones.  Well,  Mr.  Smith,  you  would  not  object  to  any  official 
seeing  your  books  at  any  time,  would  you  ? 

Mr.  Smith.  Well,  I would  in  this  sense  that  I wouldn’t  want  them 
to  come  in  there  like  this  commission  did;  they  came  in  there  and 
tied  up  our  office  for  three  or  four  weeks,  and  put  us  back  five  weeks 
in  getting  out  our  yearly  statement. 

Mr.  Jones.  Of  course  you  would  object  to  that,  but  you  under- 
stand the  national  banks  are  operated  on  a system  of  periodical 
inspection. 

Mr.  Smith.  Exactly.  But  I don’t  think  the  banks  and  industries 
like  the  packers  are  on  the  same  basis.  I don’t  believe  you  can 
compare  the  two.  An  industry  like  the  packing  industry  is  quite 
different  from  a national  bank. 

Mr.  Jones.  There  are  a great  many  details  connected  with  the 
banking  business,  and  yet  the  periodical  inspection  does  not  seem  to 
interfere  with  their  business. 


MEAT  PACKER. 


177 


Mr.  Smith.  Oh,  the  packing  business  is  not  a banking  business. 
They  are  not  operated  on  the  same  basis.  The  bank  handles  your 
funds  or  mine,  or  State  funds,  but  a packing  business  does  not. 
They  are  not  parallel  cases. 

Mr.  Jones.  I am  not  talking  about  whether  it  ought  to  be  done 
or  not.  I am  talking  about  the  inconvenience,  which  is  the  point 
you  make,  of  having  a business  inspector.  Now,  the  banking  busi- 
ness is  a business  that  runs  into  every  avenue  of  trade,  practically, 
and  it  involves  a tremendous  amount  of  detail,  and  yet  they  have  to 
go  according  to  such  rules,  and  they  must  be  subjected  to  periodical 
inspection  by  an  official,  and  he  does  not  seem  to  interfere  particu- 
1 arly  with  their  affairs. 

Mr.  Smith.  Well,  why  single  the  packing  industry  out  for  all  this 
investigation,  when  there  are  so  many  other  industries  that  seem  to 
get  by  without  any  trouble  or  excitement,  which  the  packing  busi- 
ness is  constantly  under? 

Mr.  Jones.  Well,  I wasn’t  driving  at  that  point  just  now.  I was 
driving  at  the  inconvenience,  which  you  emphasize,  that  this  would 
cause  your  institution. 

Mr.  Smith.  Yes,  it  would.  It  would  cause  us  a great  deal  of  in- 
convenience, and  I don’t  see  any  need  for  it. 

Mr.  Jones.  Now,  if  your  business  were  conducted  according  to 
certain  rules,  and  the  man  simply  came  around  to  observe  whether 
you  were  complying  with  those  rules,  do  you  think  if  he  came  around 
and  did  it  in  the  manner  in  which  it  ought  to  be  done,  that  it  would 
materially  interfere  with  your  business? 

Mr.  Smith.  Yes;  I don’t  see  any  occasion  for  it. 

Mr.  Jones.  Well,  I am  not  talking  about  the  occasion  for  it. 
Suppose  some  one  else  does  see  the  occasion  for  it,  suppose  the  public 
should  see  the  occasion  for  it,  and  should  decide  that  it  should  be 
done.  Now,  what  I am  getting  at  is  a sort  of  a specification  as  to 
why  it  would  interfere  materially  with  your  operations. 

Mr.  Smith.  Well,  it  is  not  only  the  matter  of  interfering  with  the 
office  work,  but  it  is  just  simply  a matter  where,  from  our  viewpoint, 
it  is  entirely  unnecessary  for  the  small  packers. 

Mr.  Jones.  Well,  you  can  not  brush  a thing  off  that  is  of  such 
interest  as  this  by  simply  saying  it  is  not  necessary.  I am  asking  you 
why  it  would  materially  interfere  with  your  operation  ? 

Mr.  Smith.  I don’t  know  if  you  can  brush  it  off  or  not,  but  I 
noticed  that  every  question  that  was  asked  Mr.  Nash  this  morning 
was  prefaced  by  “ifs”.  Now,  are  we  going  to  base  our  legislation  on 
“ifs”? 

Mr.  Jones.  No;  we  are  not  going  to  base  our  legislation  on  ifs, 
but  we  are  not  going  to  refrain  from  having  legislation  simply  be- 
cause the  packers  don’t  want  it.  Now  we  are  going  to  have  packer 
legislation  or  we  are  not  going  to  have  packer  legislation,  as  it  may 
seem  wise  to  the  whole  people  to  have  it  or  not  to  have  it.  Now  if  the 
representatives  of  the  whole  people— and  the  Members  of  Congress 
are  the  representatives  of  the  whole  people,  including  the  packers 
and  everybody  else — find  in  their  judgment,  of  if  they  should  come 
to  the  conclusion,  in  their  judgment — which  is  a perfectly  legitimate 
hypothetical  question — if  they  reach  the  conclusion  that  legislation 
is  necessary,  then  it  is  very  important  in  framing  that  legislation  to 
know  how  far  certain  provisions  may  interfere  with  the  conduct  of  the 
46985—21 12 


178 


MEAT  PACKER. 


business,  in  order  to  determine  how  far  the  legislation  should  go, 
and  I think  the  question  is  perfectly  legitimate. 

Mr.  Smith.  Well,  I put  it  on  the  ground  that  I think  it  would  be 
very  harmful  to  the  small  packer,  because  we  have  the  Bureau  of 
Animal  Industry  inspectors,  and  if  we  are  committing  any  serious 
crimes  in  the  handling  of  the  stuff,  where  it  is  hurting  the  public,  why 
they  certainly  can  take  care  of  it.  If  we  are  doing  anything  illegal, 
why,  the  Federal  Trade  Commission  can  handle  it. 

Mr.  McLaughlin  of  Nebraska.  Well,  the  meat  inspection  act  is  a 
pretty  good  thing,  isn’t  it? 

Mr.  Smith.  Well,  in  some  ways,  possibly. 

Mr.  McLaughlin  of  Nebraska.  Don’t  you  think  that  has  worked 
out  generally  good  ? 

Mr.  Smith.  Well,  I don’t  know.  I don’t  think  that  it  has  been 
such  a wonderful  thing;  no. 

Mr.  McLaughlin  of  Nebraska.  Well,  the  testimon}^  of  a good  many 
others  is  to  the  effect  that  it  is. 

Mr.  Smith.  It  has  its  good  features,  like  anything  else. 

Mr.  McLaughlin  of  Nebraska.  Do  you  recall  how  vigorously  the 
meat  inspection  act  was  fought  by  the  same  people  that  are  fighting 
proposed  legislation  of  this  kind? 

Mr.  Smith.  No;  I don’t  recall  any  terrific  fight  that  was  put  up. 

Mr.  McLaughlin  of  Nebraska.  Well,  some  of  us  do. 

Mr.  Smith.  I was  connected  with  the  industry  at  that  time. 
I was  with  Morris  & Co.  at  that  time,  and  I would  think  that  I would 
have  known  something  about  it  if  it  was  of  such  serious  importance. 

Mr.  Kincheloe.  You  say  the  independent  packer,  or  your  firm, 
can  sell  meat  to  the  consumer  cheaper  than  the  big  packers  ? 

Mr.  Smith.  I say  it  is  as  cheap,  and  in  a great  many  cases  cheaper, 
the  same  quality  goods. 

Mr.  Kincheloe.  Wliy? 

Mr.  Smith.  Well,  let  me  tell  you  why  it  is.  I will  give  you  the 
reason  for  it.  There  is  a reason  for  this  thing.  And  it  doesn’t  make 
any  difference  whether  it  is  the  packing  business  or  what  business  it 
is.  After  you  get  to  a certain  point,  why,  you  reach  what  you  call 
diminishing  returns,  and  as  the  big  packer  has  grown,  why,  his  returns 
diminish,  because  he  has  got  a certain  amount  of  overhead  there 
which  he  has  got  to  carry  in  the  way  of  details,  where  a small  packer 
doesn’t  have  to  do  it.  By  the  time  he  has  all  that,  and  he  strikes  a 
dull  period,  he  will  lose  so  much  money  during  that  dull  period  that 
at  the  peak  of  the  year  he  can  not  make  it  up.  That  is  why  the 
smaller  packer  can  make  out  better  than  the  larger  one  in  a great 
many  cases. 

Mr.  Kincheloe.  Well,  the  general  economic  business  theory  is 
that  they  can  operate  cheaper,  isn’t  it,  because  they  are  large? 

Mr.  Smith.  Well,  I don’t  know  about  what  the  theory  is.  I am 
only  talking  about  the  facts. 

Mr.  Voigt.  Well,  now,  the  fact  is  that  the  five  big  packers  have 
not  yet  reached  the  point  of  diminishing  returns,  because  up  to  date 
they  have  been  growing  faster  in  their  business  than  the  small  packer  ? 

Mr.  Smith.  They  have  been  growing,  I agree  with  you,  but  their 
return  on  their  investment  has  been  decreasing.  I know  that  from 
the  time  that  I was  with  Morris  & Co.  They  don’t  begin  to  make  the 
percentage  of  profit  that  they  did  in  those  days. 


MEAT  PACKER.  179 

Mr.  Kincheloe.  Do  you  think  that  is  because  of  their  business 
enlarging  ? 

Mr.  Smith.  I think  it  is. 

Mr.  Kincheloe.  Well,  then,  why  would  they  want  it  enlarged? 
If  that  is  the  case,  why  would  they  want  their  business  to  grow  larger  ? 

Mr.  Smith.  Well,  no  business  can  stand  still.  They  have  either 
got  to  go  ahead  or  go  back. 

Mr.  Kincheloe.  Well,  then,  according  to  your  theory  it  would 
have  paid  them  to  go  back  instead  of  enlarging  ? 

Mr.  Smith.  No;  it  would  not. 

Mr.  Kincheloe.  Well,  you  say  when  they  get  to  a certain  point, 
and  you  say  Morris  & Co.  have  already  got  to  that,  they  begin  to  go 
back.  You  specified  Morris  & Co. 

Mr.  Smith.  No;  I didn’t  specify. 

Mr.  Kincheloe.  Well,  you  mentioned  Morris  & Co. 

Mr.  Smith.  Well,  any  company. 

Mr.  Kincheloe.  Well,  you  say  that  Morris  & Co.  were  not  making 
as  much  as  they  used  to. 

Mr.  Smith.  Yes;  in  that  case. 

Mr.  Kincheloe.  And  evidently  on  the  theory  that  they  had  grown 
too  large. 

Mr.  Smith.  No;  I didn’t  say  they  have  grown  too  large.  I say  they 
have  reached  the  point  of  diminishing  returns. 

Mr.  Kincheloe.  Well,  because  of  their  immensity,  because  of  the 
immensity  of  their  business  ? 

Mr.  Smith.  Exactly.  And  that  is  done  by  the  heavy  overhead. 

Mr.  Kincheloe.  Well,  the  point  I am  making  is  this:  If  it  is 
because  of  their  immensity  of  business,  and  you  say  they  can  not 
stand  still,  why  wouldn’t  they  want  to  decrease  instead  of  increasing, 
to  get  bigger  returns  ? 

Mr.  Smith.  You  have  to  ask  them. 

Mr.  Kincheloe.  I will  ask  you,  because  that  is  an  unusual  theory 
of  economics. 

Mr.  Smith.  No,  it  is  not.  It  will  apply  in  any  business.  Not 
only  this  but  any  business. 

Mr.  Kincheloe.  Does  your  company  own  any  yards? 

Mr.  Smith.  No,  sir;  we  haven’t  any  stockyards  stock  whatever. 

Mr.  Kin cheloe . Where  do  you  go  to  buy  your  stock? 

Mr.  Smith.  To  the  different  stockyards  through  the  country. 
That  is,  you  might  say,  Kansas  City  and  east  of  there.  We  don’t 
get  anything  west  of  Kansas  City. 

Mr.  Kincheloe.  You  ship  them  on  foot  to  your  plant? 

Mr.  Smith.  Yes. 

Mr.  Kincheloe.  Well,  according  to  your  idea,  you  don’t  think  it 
ought  to  be  bothered  at  all  ? 

Mr.  Smith.  Absolutely  not.  I am  opposed  to  any  legislation  of 
that  character. 

Mr.  McLaughlin  of  Nebraska.  That  includes  stockyards,  too  ? 
You  are  not  in  favor  of  regulating  stockyards? 

Mr.  Smith.  Yes,  sir.  I don’t  see  any  terrible  evil  about  the  stock- 
yards. 

Mr.  McLaughlin  of  Nebraska.  Well,  now,  up  in  Minnesota  before 
the  State  law  there  went  into  operation  regulating  the  stockyards, 
the  shippers  into  those  yards  were  sold  75-pound  bales  of  hay;  that 


180 


MEAT  PACKER. 


is,  they  were  sold  bales  of  hay  that  were  supposed  to  be  100-pound 
bales,  and  paid  for  100  pounds  to  the  bale.  Their  grain  was  thrown 
in  on  the  ground  and  wallowed  over  by  the  stock,  and  then  afterwards 
cleaned  up  and  resold.  And  the  scales  in  the  yards  all  had  10-pound 
brakes  on  them.  After  the  State  law  began  to  operate  they  put 
troughs  in  to  feed  the  stock  in.  They  saw  that  the  feed  was  all 
weighed  out,  and  when  100  pounds  were  charged  for  100  pounds 
were  delivered.  And  they  assembled  all  of  the  scales  and  took  the 
brakes  off  so  that  they  would  actually  weigh  what  they  were  supposed 
to.  Now,  don’t  you  think  that  that  was  something  that  needed 
regulation  ? And  those  are  actual  facts. 

Mr.  Smith.  All  right.  That  is  an  isolated  case,  in  St.  Paul, 
I presume,  from  what  you  say  ? 

Mr.  McLaughlin  of  Nebraska.  That  was  in  the  stockyards  at 
South  St.  Paul. 

Mr.  Smith.  That  condition  existed  at  South  St.  Paul? 

Mr.  McLaughlin  of  Nebraska.  Yes. 

Mr.  Smith.  Well,  I had  not  heard  of  that. 

Mr.  McLaughlin  of  Nebraska.  And  other  evils  in  the  country. 
Don’t  you  think  they  needed  regulation? 

Mr.  Smith.  Well,  if  such  evils  as  that  exist  they  ought  to  be 
corrected.  It  may  be  they  do  exist  at  the  stockyards.  But  that  is 
no  occasion  why  the  packers  should  be  saddled  with  other  additional 
burdens  and  other  additional  annoyances. 

Mr.  McLaughlin  of  Nebraska.  You  said  that  you  were  opposed 
to  any  legislation  of  this  character  ? 

Mr.  Smith.  Well,  I mean  governing  the  packing  industry. 

Mr.  Kincheloe.  Do  you  mean  when  an  evil  like  that  exists  it 
should  not  be  corrected  ? 

Mr.  Smith.  Yes;  it  should  be  corrected. 

Mr.  Kincheloe.  Well,  how  can  it  be  corrected  unless  Congress 
acts  to  correct  it  ? 

Mr.  Smith.  You  say  stockyards. 

Mr.  Kincheloe.  Well,  take  the  stockyards. 

Mr.  Smith.  Well,  if  that  exists  in  the  stockyards,  I don’t  see  why 
the  packing  industry  should  be  put  under  the  same  rule. 

Mr.  McLaughlin  of  Nebraska.  There  are  other  practices  of  the 
packers  that  are  on  record  that  might  need  correction,  too. 

Mr.  Jones.  You  spoke  of  the  former  profits  of  the  packers.  It 
has  been  suggested  a good  many  times  that  a portion  of  those  profits, 
at  least,  were  made  by  virtue  of  rebates,  given  because  of  the  amount 
of  shipments.  Do  you  think  it  was  wise  to  correct  that  evil  ? 

Mr.  Smith.  I can’t  answer  that.  That  is  something  that  is  up  to 
the  big  packer.  But  if  such  is  the  case  I can’t  see  why  the  smaller 
packers  should  be  saddled  with  a whole  lot  of  legislation  of  that 
character.  Of  course,  if  those  evils  do  exist,  I don’t  know  anything 
about  that.  During  my  13  years  with  Morris  & Co.  in  Chicago  I 
knew  of  no  rebates.  I was  at  that  time  one  of  their — well,  I won’t 
say  prominent  men,  but  one  of  their  representative  men. 

Mr.  Jones.  You  know  that  there  were  a great  many  rebates 
granted  not  only  to  the  packers  but  to  others  ? 

Mr.  Smith.  Well,  what  was  openly  granted  I knew  like  anybody 
else,  but  as  far  as  rebates  were  concerned,  I didn’t  know  anything 
about  them. 


MEAT  PACKER. 


181 


Mr.  Jones.  I won’t  say  that  all  of  them  were  open  rebates,  but 
there  were  a great  many  rebates  granted  to  shippers  who  had  a great 
many  things  to  ship.  Now,  the  railways  always  fought  regulation. 
They  fought  the  provisions  requiring  them  to  have  automatic  cou- 
plers, for  instance.  They  admitted  later  that  it  was  a fine  thing  to 
have  when  the  law  required  them  to  have  them.  But  they  didn’t 
even  want  to  have  automatic  couplers  between  the  cars.  They 
always  say,  “Turn  business  loose.”  But  if  you  are  going  to  allow  a 
business  to  grow,  and  grow  legitimately,  certain  regulatory  legislation 
must  be  adopted  in  the  interest  of  the  public.  Now,  the  question  is 
just  how  far  those  regulatory  measures  should  go.  Now,  I don’t 
know  whether  it  is  necessary  in  this  case.  That  is  what  we  are 
investigating.  Now,  what  particular  measure  would  you  specify  in 
addition  to  the  ones  that  you  have  enumerated,  if  any?  You  enu- 
merated them  a while  ago,  and  I want  to  know  if  there  are  any  other 
features  of  this  bill. 

Mr.  Smith.  Well,  mentioning  the  rebate  feature,  if  there  is  any- 
thing like  that  existing  at  the  present  time  the  Interstate  Commerce 
Commission  can  handle  that. 

Mr.  Jones.  Well,  I don’t  know  that  there  is.  I was  just  speaking 
of  that  formerly  having  existed,  and  the  efforts  made  to  correct  that 
by  regulation. 

Mr.  Kincheloe.  Well,  if  there  should  be  lack  of  competition 
among  the  big  packers  in  the  country  in  the  buying  of  stock,  you 
would  concede  that  as  an  evil,  wouldn’t  you,  and  to  the  detriment  of 
the  consumer  ? 

Mr.  Smith.  There  comes  up  that  question  “if”  again. 

Mr.  Kincheloe.  I am  putting  that  on  that  ground. 

Mr.  Smith.  How  is  that  now  again  ? 

Mr.  Kincheloe.  I say,  if  there  is  a lack  of  competition  among 
the  packers  in  buying  the  stock,  you  would  concede  that  that  is  an 
evil  that  ought  to  be  regulated,  wouldn’t  you? 

Mr.  Smith.  Well,  there  isn’t  any  lack  of  competition.  We  go  on 
the  market  and  buy  hogs  just  the  same  as  Swift  & Co.  and  Morris  & 
Co.  and  Armour  & Co.,  or  anybody  else.  We  all  go  on  the  market 
and  buy  hogs  in  just  the  same  way.  There  isn’t  any  lack  of  competi- 
tion. We  buy  hogs  like  anybody  else. 

Mr.  Kincheloe.  Well,  you  are  talking  about  your  business. 

Mr.  Smith.  And  the  other  independent  firms  have  the  same 
privilege. 

Mr.  Kincheloe.  Well,  how  about  the  big  packers? 

Mr.  Smith.  Well,  they  buy  in  all  the  yards  the  same  as  the  small 
packers. 

Mr.  Kincheloe.  Do  you  say  there  is  no  lack  of  competition  with 
the  big  packers  ? 

Mr.  Smith.  No;  I don’t  say  there  is  no  competition.  I say  there  is 
competition  with  everybody.  For  instance,  if  there  are  100  cars  of 
hogs  in  the  market  to-day,  and  there  should  be  bids  for  150,  if  there 
should  come  in  bids  for  hogs  from  people  on  the  outside,  the  market 
would  be  ap:  to  stiffen,  while  if  there  are  100  cars  of  hogs  and  there 
are  only  orders  for  50  cars,  it  is  apt  to  weaken  a trifle. 

Mr.  Kincheloe.  Well,  it  was  reported  to  the  Federal  Trade  Com- 
mission where  Swift  & Co.  and  Morris  & Co.  bought  their  cattle  in 
Denver  50-50.  What  about  that? 


182 


MEAT  PACKER. 


Mr.  Smith.  I can’t  explain  that. 

Mr.  Kincheloe.  You  don’t  know  anything  about  that? 

Mr.  Smith.  No;  I don’t  know  anything  about  that.  I don’t  know 
anything  about  Armour  & Co.’s  or  Swift  & Co.’s  business. 

Mr.  Kincheloe.  Then  you  say  that  if  there  is  a lack  of  competi- 
tion among  the  big  packers  you  don’t  know  about  that  personally, 
do  you  ? 

Mr.  Smith.  Well,  you  may  strike  an  isolated  case  that  way,  like 
in  Denver  or  in  St.  Paul. 

Mr.  Kincheloe.  Well,  let  us  see  about  that,  whether  that  is  an 
isolated  case.  If  Swift  and  Morris  could  do  that  in  Denver,  couldn’t 
all  five  of  them  do  that  in  Chicago? 

Mr.  Smith.  Well,  it  is  hardly  possible  in  Chicago. 

Mr.  Kincheloe.  Why? 

Mr.  Smith.  Because  of  the  number  of  buyers  that  are  in  there. 
They  are  in  there  from  all  over  the  country. 

Mr.  Kincheloe.  Well,  if  it  is  a fact,  as  the  Federal  Trade  Com- 
mission says  there,  that  about  86  per  cent  of  the  business,  interstate 
commerce,  is  controlled  by  the  Big  Five  packers,  how  do  the  inde- 
pendent packers,  who  handle  only  14  per  cent,  control  the  market? 

Mr.  Smith.  I don’t  think  that  figure  of  14  per  cent  is  right,  as 
far  as  the  hog  business  goes.  I think  the  large  packers  on  the  actual 
slaughtering  handle  about  55  per  cent,  and  the  small  packers  45 
per  cent. 

Mr.  Kincheloe.  Of  interstate  commerce  ? 

Mr.  Smith.  No. 

Mr.  Kincheloe.  I am  talking  about  interstate  commerce. 

Mr.  Smith.  Well,  that  is  not  a fair  comparison.  Because  there 
is  so  much  stuff  killed  in  the  various  States  that  doesn’t  get  out  of 
the  States  where  it  is  killed. 

Mr.  Kincheloe.  Well,  where  it  is  killed  and  used  at  home? 

Mr.  Smith.  Yes. 

Mr.  Kincheloe.  I am  not  talking  about  that.  I am  talking  about 
the  products  that  enter  interstate  commerce. 

Mr.  Smith.  Well,  I couldn’t  just  speak  of  the  interstate  commerce. 
I know  the  killing  that  is  being  done  by  the  various  firms  around 
the  country,  and  what  the  independent  companies  do  and  what  the 
larger  packers  do. 

Mr.  Kincheloe.  You  don’t  know  the  percentage,  and  therefore 
you  don’t  know  the  proportion  that  goes  in  interstate  commerce? 

Mr.  Smith.  I do  know  the  per  cent  that  they  kill.  That  is  pub- 
lished in  the  papers. 

Mr.  Kincheloe.  I am  not  talking  about  that.  That  is  not  my 
question.  You  don’t  know  how  much  goes  in  interstate  commerce  ? 

Mr.  Smith.  You  mean  that  is  shipped  interstate? 

Mr.  Kincheloe.  Yes. 

Mr.  Smith.  No;  I don’t  know  that. 

Mr.  Kincheloe.  Therefore  you  don’t  know  whether  the  figures 
that  are  put  out  by  the  Federal  Trade  Commission  are  correct  or 
not,  do  you,  Mr.  Smith? 

Mr.  Smith.  No,  that  is  true. 

Mr.  Kincheloe.  That  is  what  I wanted  to  get  at. 

Mr.  Smith.  I don’t  know  that. 


MEAT  PACKER. 


183 


Mr.  Creigh  (representing  Cudahy  Packing  Co.) . Could  I make  one 
suggestion  right  there  that  is  quite  important  ? 

The  Chairman.  You  may. 

Mr.  Creigh.  Mr.  Smith  is  in  Baltimore,  we  will  say,  and  as  I 
understand,  he  kills  hogs  that  he  buys  West  and  has  shipped  in  there; 
Is  that  right  Mr.  Smith  ? 

Mr.  Smith.  That  is  right. 

Mr.  Creigh.  Now,  I don’t  know  what  proportion  of  his  business 
at  Baltimore  moves  interstate,  but  it  seems  to  me  that  it  is  perfectly 
obvious  that  whatever  he  kills  in  Baltimore  to  supply  the  local 
market  in  Baltimore  is  quite  a factor  with  Cudahy  or  Swift. 

Mr.  Smith.  Well,  on  that  line  I would  say  that  of  our  entire 
business  65  per  cent  of  it  would  be  in  the  State  of  Maryland.  That 
is  an  illustration  of  how  the  interstate  figuring  does  not  show  it  in 
exactly  the  true  light. 

Mr.  Kincheloe.  How  many  head  of  cattle  and  hogs  do  you  kill 
on  an  average  ? 

Mr.  Smith.  We  don’t  kill  any  cattle. 

Mr.  Kincheloe.  Well,  hogs? 

Mr.  Smith.  About  200,000  hogs. 

Mr.  Kincheloe.  A year? 

Mr.  Smith.  Yes. 

Mr.  Kincheloe.  What  per  cent  of  that  is  in  Baltimore,  do  you 
say  ? You  mentioned  65  per  cent  ? 

Mr.  Smith.  Not  in  Baltimore.  I say  65  per  cent  of  our  business  is 
in  the  State. 

Mr.  Kincheloe.  Well,  I mean  in  Maryland  ? 

Mr.  Smith.  About  65  per  cent;  that  is,  approximately.  Now,  you 
can  take  some  of  the  larger  packers  in  Philadelphia.  There  are 
some  of  those  companies  there  that  kill  possibly  300,000  hogs  a year, 
some  of  the  large  ones  there,  and  I will  venture  to  say  that  80  per 
cent,  yes,  fully  80  per  cent  of  it  stays  in  the  State  of  Pennsylvania. 

Mr.  Kincheloe.  Well,  of  course  that  is  true;  but  I am  not  talking 
about  the  per  cent. 

Mr.  Smith.  Well,  that  changes  that  considerably. 

Mr.  Kincheloe.  I am  not  talking  about  the  per  cent.  That  does 
not  interest  me  at  all.  But  the  shippers  in  that  State,  where  the 
stock  is  bought,  right  there 

Mr.  Smith  (interrupting).  It  is  not  bought  there,  excuse  me,  sir. 
It  comes  from  the  West. 

Mr.  Kincheloe.  I thought  you  said  there  was  no  live-stock 
interstate. 

Mr.  Smith.  Consumed. 

Mr.  Kincheloe.  Consumed? 

Mr.  Smith.  Yes. 

Mr.  Kincheloe.  Well,  that  may  be.  The  idea  that  I was  getting 
at  was  as  to  the  proportion  of  the  business  of  these  packers  that  enters 
into  interstate  commerce. 

Mr.  Smith.  What  do  you  mean  by  the  business?  Do  you  mean 
by  that  the  live  stock  that  we  are  getting  East  ? 

Mr.  Kincheloe.  Yes;  the  live  stock  that  you  get. 

Mr.  Smith.  Why,  the  live  stock  that  is  killed  in  the  East,  I venture 
to  say  that  80  per  cent  of  it  comes  from  the  West. 


184 


MEAT  PACKER. 


Mr.  Kincheloe.  So  that  is  a big  per  cent. 

Mr.  Smith.  Yes. 

Mr.  Kincheloe.  Interstate  commerce? 

Mr.  Smith.  Yes;  of  the  live  stock.  I thought  you  were  speaking 
of  the  output. 

Mr.  Kincheloe.  No. 

Mr.  Voigt.  If  you  will  just  permit  me  to  inject.  At  page  40 
of  part  2 of  the  report  of  the  Federal  Trade  Commission  there  is  a 
table  which  gives  the  number  of  animals  of  all  sorts  slaughtered  by 
interstate  slaughterers  at  the  12  leading  points  in  the  United  States. 
That  shows  that  of  the  interstate  slaughtered  the  five  packers  have 
86.4  per  cent  and  all  others  13.6  per  cent  for  the  year  1916. 

Mr.  Smith.  What  were  those  points,  may  I ask  ? 

Mr.  Voigt.  Chicago,  Kansas  City,  Omaha,  St.  Louis,  New  York, 
St.  Joseph,  Fort  Worth,  St.  Paul,  Sioux  City,  Oklahoma  City,  Denver, 
and  Wichita. 

Mr.  Smith.  Well,  with  the  exception  of  New  York  practically 
every  one  of  those  places  are  points  where  the  western  packers,  the 
five  big  packers,  have  plants,  and  there  are  very  few  small  packers 
in  those  cities.  That  can  account  for  that.  Now  you  take  the 
East;  you  didn’t  mention  any  place  in  the  East  there,  I don’t  think, 
excepting  New  York.  There  are  more  hogs  killed  in  Baltimore 
than  at  any  point  east  of  Cincinnati.  So  you  see  those  records  do 
not  fit  in  just  the  way  they  should,  from  my  viewpoint.  Those 
points  they  have  there  are  the  points  where  the  big  packers  have 
their  plants,  except  New  York  City,  and  there  are  very  few  inde- 
pendent people  in  those  points.  That  explains  that.  And  you 
don’t  mention  Cincinnati,  you  don’t  mention  Buffalo,  you  don’t 
mention  Philadelphia  nor  Baltimore,  or  Detroit,  or  Cleveland,  or 
Indianapolis,  or  Louisville.  By  the  time  you  mention  those  cities 
that  they  have  left  out,  why  you  find  that  your  86  per  cent  drops  to 
about  55  per  cent,  where  we  said  it  was  about. 

The  Chairman.  It  will  be  necessary  for  us  to  take  a recess  now 
while  the  Members  go  onto  the  floor  for  a vote. 

(Thereupon  a recess  was  taken  while  the  members  of  the  com- 
mittee went  to  the  floor  of  the  House  for  a vote.) 

(After  the  recess  the  proceedings  were  resumed.) 

The  Chairman.  You  may  proceed,  Mr.  Smith. 

Mr.  Smith.  Well,  gentlemen,  I guess  there  is  very  little  more  that 
I can  say,  more  than  to  say  this,  that  I can  not  see  where  any  of  our 
economic  problems  are  solved  by  any  of  these  bills ; that  is,  from  the 
viewpoint  of  the  small  packer. 

Now,  as  far  as  the  stockyards  are  concerned,  if  such  evils  exist 
as  you  gentlemen  state,  why  I can  not  see  why  there  should  be  a bill 
saddled  on  the  packers  just  to  regulate  the  stockyards.  But  if  we 
have  got  to  have  a bill,  and  you  gentlemen  seem  to  think  it  is  a neces- 
sity, I would  think  a bill  along  the  line  of  the  Haugen  bill  would  be 
m<  1 ‘ 11  11  p Jl  J hers 'that  they  have  presented. 


His  bill  leaves  the  administra- 


tion to  the  Secretary  of  Agriculture. 

Mr.  Smith.  Yes;  that  is  the  Haugen  bill.  That  leaves  the  adminis- 
tration to  the  Secretary  of  Agriculture. 

Mr.  Kincheloe.  And  Mr.  McLaughlin’s  bill  provides  for  a special 
commission  formed  by  the  President,  and  Mr.  Anderson’s  bill 
leaves  it  to  the  Federal  Trade  Commission. 


MEAT  PACKER. 


185 


The  Chairman.  The  Anderson  hill  and  the  Haugen  bill  are  about 
the  same. 

Mr.  Smith.  Well,  I think  that  would  be  the  least  objectionable  one, 
if  we  have  to  have  one;  that  is,  the  Haugen  bill.  But  from  the  view- 
point of  the  small  packer,  ’ can’t  see  where  any  of  them  are  going  to 
solve  our  economic  problem,  because  the  small  packers,  like  the  large 
packers,  for  the  past  18  months  have  not  made  any  money. 

I don’t  think  there  is  anything  else  I have  to  say  unless  you  gentle- 
men want  to  ask  me  some  questions. 

The  Chairman.  Are  there  any  questions  to  he  asked  of  Mr.  Smith, 
Mr.  McLaughlin? 

Mr.  McLaughlin  of  Nebraska.  Just  before  we  recessed  a moment 
ago,  I was  going  to  make  a statement,  if  Mr.  Smith  will  permit,  based 
on  one  of  his  opening  statements  when  he  began  to  testify.  He  said 
in  substance  that  the  questions  of  this  committee  relative  to  whether 
or  not  any  legislation  was  needed  or  might  be  advisable,  were  all 
prefaced  by  “if.”  So  it  might  be  only  fair  to  the  committee  to  say 
that  in  examining  gentlemen  who  are  testifying  it  is  not  the  object  of 
the  committee  to  try  to  make  everybody  agree  with  what  members 
of  the  committee  may  think  or  may  have  found  out,  when  the  com- 
mittee has  before  it  here  in  one  hearing  2,864  pages  of  testimony,  and 
has  before  it  the  complete  report  of  the  Federal  Trade  Commission, 
has  before  it  Senate  hearings  on  this  same  subject,  and  thousands  and 
thousands  of  pages  of  testimony,  much  of  it  seeming  to  point  out  that 
there  are  evils  in  connection  with  the  conduct  of  this  industry, 
especially  as  pertains  to  the  Big  Five.  Now,  the  members  having  this 
evidence  in  mind,  which  the  witness  perhaps  does  not  have  in  piind 
and  has  not  taken  the  time  to  read,  why,  it  is  very  natural  that  a 
member  would  say  that  “if”  certain  things  should  appear  to  be  true, 
wouldn’t  it  be  the  logical  thing  to  pass  legislation  to  correct  it? 

Mr.  Smith.  Well,  I think  I replied  to  that  question  a few  minutes 
ago  when  I said  that  if  you  gentlemen  think  there  should  be  a bill, 
that  we  have  got  to  have  a bill — I have  looked  them  over,  just  glanced 
them  over,  all  of  them — why,  then  I think  the  Haugen  bill  would  be 
the  least  objectionable,  and  it  would  fit  in  more,  with  the  smaller 
packers  at  least,  if  you  have  got  to  have  it.  That,  I think  answers 
your  question. 

The  Chairman.  Would  you  indicate  the  objections  that  you  have 
to  either  of  the  bills?  Are  there  any  serious  objections  to  either  of 
them  ? 

Mr.  Smith.  Well,  I haven’t  studied  them  line  for  line.  Just  reading 
them  casually  I would  say  that  the  Haugen  bill  is  the  least  objection- 
able of  them;  it  is  less  objectionable  than  the  others.  The  others 
vest  too  much  power  in  the  commission. 

The  Chairman.  To  what  extent  does  the  Department  of  Agri- 
culture come  in  contact  with  the  packers  now  ? 

Mr.  Smith.  Well,  they  have  inspectors  at  the  plants;  they  have 
both  veterinarians  and  meat  inspectors.  Of  course,  we  are  under 
their  supervision  entirely.  They  look  at  all  the  product  we  turn  out. 
They  inspect  it  and  examine  it  to  see  if  it  is  sound  and  wholesome,  as 
they  term  it.  And  if  there  is  any  animal  which  they  deem  unfit  for 
human  food,  it  is  condemned. 

Now,  that  is  another  thing  that  the  packers  have  saddled  on  them 
which  seems  to  us  unjust.  We  may  go  out  here  to  the  stockyards 


186 


MEAT  PACKER. 


and  buy  10  cars  of  hogs  and  pay  the  top  of  the  market,  and  buy 
them  supposedly  for  healthy  animals.  Ten  minutes  afterwards  we 
bring  them  in  the  slaughterhouse  and  start  to  kill  them,  and  all  of 
them  are  condemned.  We  lose  the  money,  and  the  farmer  gets  it  all. 

The  Chairman.  Well,  that  is  the  Animal  Industry. 

Mr.  Smith.  Yes. 

The  Chairman.  Well,  now,  what  about  the  stockyards?  Have 
you  any  departmental  people  in  your  stockyards  ? 

Mr.  Smith.  Any  in  our  company  ? 

The  Chairman.  No;  I mean  any  representative  of  the  department 
in  your  stockyards?  They  are  in  a number  of  stockyards.  I didn’t 
know  whether  they  were  in  Baltimore. 

Mr.  Smith.  Oh,  yes;  the  Department  of  Agriculture  have  people 
there  in  the  stockyards,  inspectors. 

The  Chairman.  Well,  they  have  inspectors  there.  Do  they  have 
others  there,  reporters  of  markets,  etc.  ? Do  they  have  any  market 
reporters  there  ? 

Mr.  Smith.  I don’t  know.  [Addressing  Mr.  Greenwald.]  Mr. 
Greenwald,  do  they  make  any  reports  of  that  character? 

Mr.  Greenwald.  Yes. 

Mr.  Smith.  You  see,  we  are  not  located  in  the  yards. 

Mr.  Greenwald.  The  Bureau  of  Markets  handle  that. 

Mr.  Smith.  That  is  handled  by  the  Bureau  of  Markets. 

The  Chairman.  In  Baltimore? 

Mr.  Smith.  Yes.  They  report  that.  But  I thought  you  had 
reference  to  inspection  of  the  yards. 

TJie  Chairman.  Oh,  yes;  they  have  inspectors  in  the  yards. 

Mr.  Smith.  I didn’t  mean  the  meat  inspector.  I thought  you  had 
reference  to  what  you  termed  stockyards  inspectors. 

The  Chairman.  I was  trying  to  find  out  to  what  extent  the  activities 
of  the  department  went  in  Baltimore. 

Mr.  Kincheloe.  You  spoke  of  the  Agricultural  Department  having 
a live-stock  inspector  in  there  inspecting  those  hogs,  and  the  example 
that  you  gave  was  that  if  you  bought  hogs  and  you  paid  the  top 
price  for  them  and  they  turned  out  to  be  diseased  in  some  way  and 
were  condemned,  you  would  have  a loss.  Of  course,  it  is  unfortunate 
that  your  concern  should  have  that  loss,  but  don’t  you  think  the 
fact  that  there  are  those  inspectors  from  the  Bureau  of  Animal  In- 
dustry of  the  Agricultural  Department  is  a good  thing  to  protect  the 
public?  Now,  under  that  state  of  the  case  if  you  went  on  to  kill 
them  you  would  not  willfully  put  up  this  diseased  meat  ? 

Mr.  Smith.  No;  but  do  you  think  we  ought  to  pay  $15,000  or 
$20,000  for  some  hogs  and  have  $5,000  worth  of  them  condemned, 
and  that  the  farmer  should  get  his  money  and  we  have  no  redress 
at  ah?  ' 

Mr.  Kincheloe.  I am  not  basing  it  on  that  proposition  at  all.  I 
am  talking  about  the  proposition  that  it  is  a wholesome  thing  for 
the  public. 

Mr.  Smith.  Oh,  that  is  all  right  about  the  animals  being  con- 
demned, but  there  is  no  reason  why  we  should  pay  for  them.  That 
is  the  point  I am  making. 

Mr.  Kincheloe.  I don’t  think  you  ought  to  be  allowed  nor  should 
anybody  else  be  allowed  to  sell  diseased  meat  to  the  public  in  order 
to  make  a saving  on  the  animals.  I don’t  think  it  is  a question  of 


MEAT  PACKER.  187 

dollars.  I don't  believe  anyone  should  be  allowed  to  sell  diseased 
meat. 

Mr.  Smith.  No:  I agree  with  you  on  that,  but  then  the  farmer 
should  not  have  our  money. 

Mr.  Kincheloe.  I am  not  arguing  with  you  on  that  proposition, 
as  to  who  should  stand  the  loss,  but  I am  arguing  the  fact  that  the 
Federal  Government  has  put  an  inspection  service  in  there  to  stop 
the  sale  of  diseased  meat  for  which  you  were  not  responsible  when 
you  bought  it. 

Mr.  Smith.  You  are  absolutely  right,  but  you  are  not  going  far 
enough. 

Mr.  Kincheloe.  When  the  public  pay  the  top  price  for  the  stuff 
they  ought  to  have  good  meat. 

Mr.  Smith.  We  get  it  both  ways.  When  the  farmer  sends  in  these 
hogs  and  we  buy  them  and  they  are  condemned,  we  have  no  redress. 
And  if  we  send  out  hams  that  are  tainted,  if  they  were  not  properly 
cured,  why  we  have  to  allow  the  man  for  them.  If  we  ship  them  out, 
why  they  would  want  to  put  us  in  jail  if  we  didn’t  allow  them  for 
those  hams.  So  we  have  to  allow  them  for  those.  And  in  that  way, 
as  I say,  we  get  it  both  ways. 

Mr.  Kincheloe.  Well,  I am  not  arguing  about  who  should  bear 
the  loss;  I don’t  care  about  that,  for  the  purpose  of  this  legislation. 
But  now  don’t  you  think  that  it  is  a wholesome  thing  for  the  public, 
and  doesn’t  it  keep  the  confidence  of  the  public  in  you  gentlemen  as 
packers,  if  there  is  a representative  of  the  public  there  to  see  that 
they  get  nothing  but  good  and  sound  meat  ? 

Mr.  Smith.  Well,  do  you  mean  to  see  that  we  do  not  use  diseased 
meat  ? 

Mr.  Kincheloe.  Yes. 

Mr.  Smith.  Absolutely. 

Mr.  Kincheloe.  I don’t  mean  that  you  intentionally  would  do 
that. 

Mr.  Smith.  Yes;  sure:  I understand. 

Mr.  Kincheloe.  But  I am  talking  about  the  law. 

Mr.  Smith.  Yes. 

Mr.  Kincheloe.  I am  talking  about  the  law  requiring  that  an 
inspector  be  placed  there  to  see  that  the  public  get  nothing  but  good 
and  sound  meat. 

Mr.  Smith.  Yes.  I don’t  think  any  reputable  packer  in  the 
United  States  would  attempt  to  do  anything  like  that. 

Mr.  Kincheloe.  No;  I didn’t  mean  that. 

Mr.  Ten  Eyck.  Do  you  state  all  there  is  to  that  transaction  when 
you  state  that  when  those  hogs  were  condemned,  because  they  were 
diseased,  the  farmer  having  received  his  money  for  them,  that  you 
got  nothing? 

Mr.  Smith.  We  have  no  redress  whatever,  absolutely  none. 

Mr.  Ten  Eyck.  You  don’t  get  any  compensation  from  anybody  ? 

Mr.  Smith.  None  whatever. 

Mr.  Ten  Eyck.  Isn’t  there  a law  in  the  State  of  Maryland  that 
when  they  condemn  cattle  of  that  sort  they  compensate  you  to  the 
extent  of  a certain  amount  ? 

Mr.  Smith.  If  the  State  animal  inspectors  condemn  cattle  on  the 
farm,  they  give  the  farmer  a certain  amount  of  the  value  of  the  stock, 
a certain  per  cent.  But  if  the  packer  kills  his  hogs,  and  the  Govern- 


188 


MEAT  PACKER. 


ment  condemns  niem,  after  the  packer  has  bought  them  and  paid 
the  top  price  for  them,  he  has  no  redress.  He  may  buy  the  hogs  in 
the  morning,  and  he  may  have  handed  the  man  from  whom  he  bough  t 
the  hogs  the  money  that  very  morning,  and  that  same  afternoon 
they  might  be  condemned  by  the  Government,  but  we  W'ould  have 
no  redress.  We  lose  it  all. 

Mr.  Ten  Eyck.  Haven’t  you  got  any  experts  who  are  on  the  look- 
out for  such  things  ? 

Mr.  Smith.  We  can  not  tell  if  a hog  is  tubercular  when  he  is  walk- 
ing around  in  the  pen.  Some  of  the  finest  hogs  we  have  might  have 
what  they  call  generalized  tuberculosis,  and  you  can  not  tell  by 
looking  at  a hog  if  he  has  tuberculosis. 

Mr.  Ten  Eyck.  Can’t  you  tell  before  you  kill  the  hog  whether  ho 
is  tubercular?  Don’t  you  take  a certain  percentage  in  large  pur- 
chases of  that  kind  and  examine  them?  Don’t  you  take  every 
tenth  hog  and  make  an  examination  ? 

Mr.  Smith.  No;  nobody  would  do  that.  If  you  undertook  to  do 
anything  of  that  kind  you  never  would  get  your  stuff  out  of  the 
stockyards. 

Mr.  Ten  Eyck.  You  don’t? 

Mr.  Smith.  No. 

Mr.  Ten  Eyck.  But  it  is  possible  to  test  a hog  when  he  is  alive 
and  find  out  whether  he  is  tubercular  ? 

Mr.  Smith.  No. 

Mr.  Ten  Eyck.  Don’t  you  know  that  from  your  own  knowledge? 

Mr.  Smith.  No. 

Mr.  Ten  Eyck.  How  long  have  you  been  in  the  business  ? 

Mr.  Smith.  Thirty-one  years. 

Mr.  Ten  Eyck.  Don’t  you  know  as  to  whether  you  can  test  a hog 
or  cattle  while  alive,  for  tuberculosis  ? 

Mr.  Smith.  Well,  yes;  you  can,  I suppose. 

Mr.  Ten  Eyck.  Don’t  you  know  that? 

Mr.  Smith.  But  you  would  never  get  the  stuff  out  of  the  yards  if 
you  attempted  to  test  every  hog  in  there  and  every  steer. 

Mr.  Ten  Eyck.  No;  I was  just  merely  asking  you  whether  you 
knew  from  your  own  knowledge  if  that  could  be  done.  You  made 
the  statement  that  there  was  no  way  to  tell  while  the  animal  was 
alive. 

Mr.  Smith.  I retract  that.  I mean  there  is  no  way  of  telling  by 
looking  at  the  hog. 

The  Chairman.  But  you  take  the  loss  into  account  in  estimating 
cost  and  profits?  The  loss  is  distributed  among  all? 

Mr.  Smith.  No,  indeed.  If  there  are  so  many  hogs  lost  and  if 
there  are  so  many  cattle  lost  out  of  the  purchase,  that  is  usually 
counted  up  in  the  shrinkage. 

The  Chairman.  If  no  losses  were  incurred  on  account  of  tuber- 
culosis you  would  pay  more  for  them  ? 

Mr.  Smith.  Yes;  I should  judge  so.  The  more  they  lose  the 
higher  the  cost  is. 

The  Chairman.  I always  understood  that  that  was  taken  into 
account,  and  was  taken  as  part  of  the  cost  in  estimating. 

Mr.  Smith.  No;  that  would  just  be  the  shrinkage  on  that  par- 
ticular purchase,  whatever  the  loss  may  be. 


MEAT  PACKER. 


189 


Mr.  Kincheloe.  What  is  the  reason  you  would  not  have  an  action 
in  court  against  the  person  from  whom  you  bought  that  carload 
of  hogs? 

Mr.  Smith.  I couldn’t  answer  that.  Maybe  some  of  the  legal 
gentlemen  here  can  answer  that  question. 

Mr.  Jones.  But  you  are  in  a little  different  position  from  the 
farmer  in  this,  that  the  farmer  does  not  fix  his  own  price,  and  you, 
in  a large  measure,  fix  the  price  you  pay  him,  and  the  price  you 
sell  your  products  for.  And  in  fixing  this  price  you  charge  this  to 
profit  and  loss,  in  the  general  run  of  the  business,  these  losses  you 
have  here,  and  the  prices  are  fixed  in  such  a way,  the  prices  you 
pay  generally,  and  the  prices  you  sell  your  meat  for,  that  you  make 
a profit. 

Mr.  Smith.  No;  you  can’t  do  that.  There  may  be  10  packers  in 
a town,  and  each  one  of  them  might  kill  10  carloads  of  hogs,  for 
illustration.  Now  1 man  out  of  the  10,  we  will  say,  might  have  2 
cars  condemned  for  tuberculosis.  Now,  that  man  can  put  his  price 
anywhere  he  wants  to,  but  he  can  not  get  any  more  than  the  other 
nine  fellows. 

Mr.  Jones.  But  in  the  general  run  of  the  business,  they  all  have 
the  experience,  and  in  the  general  run  of  the  business  this  is  charged 
as  one  of  the  expenses  of  the  business,  and  the  prices  are  fixed  in 
such  a way  that  most  of  the  packers  that  operate  properly  make  a 
profit,  and,  of  course,  this  goes  in  as  one  of  the  expenses,  doesn’t 
it,  in  the  general  run  of  each  man’s  business  ? 

Mr.  Smith.  Well,  you  can  call  it  expense  if  you  want  to.  I call 
it  a dead  loss. 

Mr.  Jones.  Well,  it  is  an  expense  even  if  it  is  a dead  loss,  isn’t  it? 

Mr.  Smith.  Yes. 

Mr.  Jones.  Most  expense  is  a dead  loss,  isn’t  it? 

Mr.  Smith.  Yes;  that  is  true,  but  there  is  no  reason  why  we 
should  hand  out  our  money  for  diseased  animals.  Now,  as  the  gen- 
tleman asked  there:  Can’t  you  tell  by  examining  these  animals? 
Certainly,  a veterinarian  could  examine  each  one  of  them,  I presume, 
unless  it  is  a very  concealed  case,  and  tell  whether  the  animal  is 
diseased  or  not  before  the  animal  is  slaughtered;  but  if  you  attempt 
to  go  into  the  stock  yards  and  buy  hogs  and  cattle  and  have  each 
one  of  these  animals  examined  before  it  is  purchased  and  bought, 
why  you  could  not  operate. 

Mr.  Jones.  That  is  a matter  of  business  judgment.  Whether  it  is 
better  to  go  ahead  and  take  your  chances  on  the  loss,  or  whether  it 
is  better  to  examine  each  animal  and  make  a test  of  it  before  you 
buy  it,  is  a matter  of  business  judgment.  Now,  as  to  whether  it  is 
better,  a better  business  policy,  to  take  all  of  them  as  they  come  on 
sight  and  take  your  loss  when  they  are  condemned,  along  with  the 
other  fellow,  or  whether  it  is  better  to  have  them  examined  by  a 
man  of  your  own,  that  is  a matter  of  business  judgment.  In  either 
event  it  should  be  charged  to  expense. 

Mr.  Smith.  Well,  you  go  out  to  the  stockyards  and  examine  a 
couple  of  carloads  of  hogs,  and  you  will  see  how  long  it  would  take. 
You  couldn’t  operate. 

Mr.  Jones.  Well,  you  are  not  in  any  worse  position  than  your 
competitive  packer,  are  you  ? 

Mr.  Smith.  No. 


190 


MEAT  PACKER. 


Mr.  Jones.  You  are  on  the  same  basis? 

Mr.  Smith.  Yes;  but  nevertheless  the  farmer  ought  not  to  receive 
money  for  a whole  lot  of  diseased  animals. 

Mr.  Jones.  But  the  farmer  should  receive  a profit  on  his  animals. 

Mr.  Smith.  Yes;  and  so  should  the  packer. 

Mr.  Jones.  But  it  frequently  happens  that  the  average  farmer  can 
not  make  the  profit  that  the  packer  can  make. 

Mr.  Smith.  I have  not  been  in  the  farming  business,  so  I couldn't 
say. 

Mr.  Ten  Eyck.  I didn't  mean,  when  I was  asking  you  the  question, 
that  we  wanted  you  to  test  every  animal.  I mean  that  you  would 
test,  say,  1 out  of  every  10,  if  you  were  buying  a large  number  of 
hogs,  which  would  mean  a large  investment.  In  addition  to  that, 
isn't  it  true  that  some  cattle  that  are  tubercular,  and  that  the  State 
has  condemned,  and  for  which  the  farmer  is  paid,  that  a lot  of  those 
cattle  are  permitted  to  be  sold  and  eaten,  because  the  meat  is  not 
bad  for  human  consumption  ? 

Mr.  Smith.  I don't  know  of  any  cattle  that  the  State  veterinarians 
have  condemned  with  which  that  is  allowed  to  be  done.  I never 
heard  of  such  a thing. 

Mr.  Ten  Eyck.  You  never  heard  of  such  a thing? 

Mr.  Smith.  No,  sir. 

Mr.  Ten  Eyck.  Well,  I think  they  do  that. 

Mr.  Smith.  Not  in  the  State  of  Maryland.  In  the  State  of  Mary- 
land if  they  condemn  any  cattle  for  tuberculosis  they  bury  them.  I 
don't  know  what  they  do  in  the  other  States.  The  State  veterina- 
rians there  bury  them.  They  put  quicklime  on  them. 

Mr.  Ten  Eyck.  Of  course,  you  are  in  the  State  of  Maryland.  I 
don't  know  your  laws.  But  I know  there  are  laws  on  statute  books 
in  different  States  whereby  there  are  certain  degrees  of  infection 
recognized  as  not  affecting  the  meat. 

Mr.  Greenwald.  Oh,  well,  that  is  a different  proposition. 

Mr.  Smith.  I don't  know  anything  about  that. 

Mr.  Ten  Eyck.  And  the  meat  can  be  sold,  but  nevertheless  that 
cow  is  condemned  for  tuberculosis. 

Mr.  Greenwald.  They  won't  let  you  use  a tubercular  cow  for 
human  food.  There  may  be  one  gland  in  the  neck.  For  tapeworm 
they  will  permit  you  to  sterilize  it,  put  it  under  steam  pressure,  and 
it  can  be  only  used  for  a certain  product.  But  they  won't  permit 
you  to  use  a tubercular  cow  for  human  food.  All  animals  that  are 
tubercular  are  condemned. 

The  Chairman.  In  the  State  of  Maryland  ? 

Mr.  Greenwald.  In  any  State  where  there  is  Federal  inspection. 

The  Chairman.  In  any  State  where  there  is  Federal  inspection? 

Mr.  Greenwald.  Yes.  But  for  tapeworm  they  permit  you,  under 
Federal  inspection,  to  sterilize  the  meat. 

Mr.  Jones.  They  don't  permit  you  to  use  any  portion  of  the  carcass 
when  the  carcass  is  condemned?  If  an  animal  is  condemned,  they 
won’t  permit  you  to  use  any  portion  of  it? 

Mr.  Greenwald.  Not  when  they  are  tuberculosed. 

Mr.  Jones.  You  can  use  the  hide. 

Mr.  Greenwald.  Yes;  but  not  the  carcass. 

Mr.  Ten  Eyck.  Is  that  a Federal  law? 

Mr.  Greenwald.  That  is  a Federal  law. 


MEAT  PACKER. 


] 91 


The  Chairman.  Federal  regulation. 

Mr.  Greenwald.  In  the  State  of  Maryland  we  have  a State  in- 
spection which  is  a joke.  The  Federal  inspection  is  all  right. 

The  Chairman.  Does  that  apply  to  cattle  and  hogs  ? 

Mr.  Greenware.  Yes. 

The  Chairman.  But  the  same  rule  applies  to  the  feeder  as  to  the 
packer.  The  feeder  buys  a steer  or  a carload  of  cattle,  and  if  they  are 
found  to  be  diseased,  the  loss  is  borne  by  him. 

Mr.  Smith.  No;  the  packer  generally  buys  them  from  the  farmer. 

The  Chairman.  Fie  puts  them  in  the  yard,  and  if  the  animal  dies 
in  the  yard  he  stands  the  loss  ? 

Mr.  Smith.  Yes;  he  stands  the  loss. 

The  Chairman.  Anything  else  ? 

Mr.  Smith.  That  is  all  I have.  Thank  you. 

Mr.  Ligiitfoot.  I will  ask  you  to  hear  Mr.  Taliaferro. 

The  Chairman.  Very  well. 

STATEMENT  OF  THOMAS  W.  TALIAFERRO,  VICE  PRESIDENT 

AND  GENERAL  MANAGER  HAMMOND,  STANDISH  & CO.,  DE- 
TROIT, MICH. 

The  Chairman.  You  may  proceed. 

Mr.  Taliaferro.  Are  there  any  questions  you  want  to  ask  of  me, 
Mr.  Haugen? 

The  Chairman.  You  can  go  on  in  your  own  way.  Do  you  prefer 
to  go  on  and  make  your  statement,  Mr.  Taliaferro  ? 

Mr.  Taliaferro.  Well,  I came  down  to  appear  before  you  gentle- 
men in  opposition  to  the  several  bills  that  are  before  you.  And  I did 
that  for  the  reason  that  I can  not  see  where  any  good  could  possibly 
come  from  them,  or  where  they  could  correct  any  supposed  evils  in 
the  business. 

Now,  with  reference  to  the  bills  that  you  have  before  you.  The 
McLaughlin  bill  I would  consider  a very  drastic  measure  and  one  cal- 
culated to  do  the  industry  a great  deal  of  harm. 

The  Haugen  bill  is  not  so  drastic  in  its  provisions,  and  with  some 
eliminations,  perhaps  with  some  changes — if  the  committee  thinks 
that  a bill  at  all  is  necessary — I believe  could  be  made  to  at  least  not 
handicap  the  business  more  than  it  is  at  the  present  time. 

The  packing  business  now  is  in  a very  critical  state.  It  has  been 
in  a very  critical  state  for  the  past  two  or  three  years,  and  it  needs 
all  of  the  help  that  it  can  possibly  get  to  pass  over  the  present  very 
unfavorable  situation,  and  I feel  that  it  would  be  in  the  province  of 
this  committee  and  in  the  province  of  Congress  to  do  everything  they 
could  to  help  the  business,  which  is  the  most  fundamental  in  this 
country,  rather  than  to  handicap  it  in  any  way.  Being  a perishable 
business,  and  dealing  only  in  perishable  products,  it  is  very  susceptible 
to  the  least  unfavorable  conditions.  The  conditions  in  this  business, 
as  I said  before,  have  been  very  unfavorable.  I don’t  think  that 
there  is  a packer  in  the  United  States  that  has  made  any  money  in 
the  last  two  or  three  years,  and  in  my  estimation,  the  business  will 
not  survive  if  this  is  continued  for  another  year.  It  certainly  now 
is  in  such  shape  that  any  unfavorable  legislation  would  react  to  the 
great  disadvantage  of  the  business,  both  of  the  producer  and  the 
consumer. 


192 


MEAT  PACKER. 


The  packing  business  is  naturally  one  that  everybody  takes  a 
crack  at  for  the  simple  reason  that  high  prices  to  the  producer  means 
high  prices  to  the  consumer,  and  the  reverse  is  true.  So  that  in 
order  to  satisfy  the  producer  and  get  him  a profit  on  producing  and 
thereby  continue  the  industry,  profitable  prices  have  to  be  paid. 
That  brings  a fire  from  the  consumer.  So  that  the  packer  himself 
is  between  the  devil  and  the  deep  sea.  He  has  no  friends,  because 
in  the  nature  of  the  business  he  can  hardly  expect  it,  because  the 
minute  that  he  pleases  one-half  of  the  population  he  offends  the  other 
half,  and  when  the  reverse  conditions  are  in  effect  he  has  the  opposi- 
tion of  the  other  side. 

There  have  been  in  all  businesses,  as  well  as  the  packing  business, 
some,  perhaps,  faults,  that  I think,  to  a large  extent  have  been 
eliminated  in  the  packing  business.  I have  been  in  this  business  42 
years.  I have  never  done  anything  else.  I started  in  with  a knife 
in  my  hand  trimming  little  pieces  of  sausage  meat.  And  I have  seen 
it  grow  through  all  of  the  stages  in  the  development  of  the  wonderful 
business  that  is  now  in  existence.  And  I would  hate  to  see  at  my 
time  of  life  anything  done  to  handicap,  retard  or  destroy  the  business 
that,  in  my  estimation,  is  the  most  fundamental  business  in  this 
country.  And  I think  that  legislation  of  any  kind — it  doesn’t  make 
any  difference  what  kind  of  business  it  is — that  acts  as  a brake  or 
retards  the  free  flow  of  the  product  from  the  producer  to  the  con- 
sumer, will  react  to  the  disadvantage  of  both. 

The  legislation  that  has  been  proposed  before  the  last  two  or  three 
sessions  of  Congress,  in  my  estimation  has  done  a great  deal  to  hurt 
the  industry,  because  it  has  unsettled  credit,  it  has  made  it  increas- 
ingly hard  to  get  money,  it  has  made  it  increasingly  hard  to  do  busi- 
ness abroad,  it  has  engendered  the  opposition  and  fanned  the  flame 
of  prejudice  which  now,  above  all  times,  it  should  be  everybody’s 
endeavor  to  eliminate. 

And  if  I may  be  allowed  to  suggest  one  thing,  it  is  this:  To  give 
business  a chance,  stop  regulating  it.  Let  it  flow  freely  and  let  every- 
body put  their  shoulders  to  the  wheel  and  get  this  business  which 
is  now  in  the  dumps  out  on  dry  and  solid  foundation. 

If  there  is  any  question  that  you  gentlemen  want  to  ask  I feel  that 
perhaps  I might  be  able  to  answer  it,  because  I have  spent  my  life 
in  this  business.  As  I said,  I started  as  a laborer,  and  I have  been 
in  every  department  in  the  packing  business.  There  is  not  one  single 
department,  from  the  mechanical  to  the  executive,  that  I have  not 
at  some  time  filled.  And  I don’t  know  of  any  angle  that  I have  not 
viewed  it  from,  been  actually  engaged  in,  and  therefore  I feel  per- 
fectly competent  to  answer  honestly  and  fearlessly  any  question  or 
criticism  or  inquiry  that  may  be  presented. 

Mr.  Kincheloe.  Mr.  Taliaferro,  you  speak  of  everybody  taking 
a crack  at  the  packers  and  interfering  with  legitimate  business  by 
Congress.  An  unfortunate  thing  is  that  a whole  lot  of  people  have 
been  taking  a crack  at  Congress.  As  far  as  I am  concerned,  I have 
been  a member  of  Congress  for  six  years,  and  I think  I am  pretty 
well  acquainted  with  the  personnel  of  this  House.  I have  tried  to 
be  a student  of  legislation.  Now,  as  I said,  I have  been  here  for  six 
years,  all  during  the  war,  and  from  my  observation,  I don’t  believe — 
there  might  be  some  exceptions — but  you  take  the  personnel  of  this 
House,  and  I don’t  believe  that  with  these  435  men  representing 


MEAT  PACKER. 


193 


districts  in  which  every  line  of  human  endeavor  is  conducted,  every 
man  supposed  to  be  fairly  and  impartially  representing  the  great 
people  of  his  district,  I don’t  believe  that  there  is  a Member  of  Con- 
gress who  wants  to  interfere  with  legitimate  business  legitimately 
conducted.  So  I don’t  think  you  appear  before  a prejudiced  com- 
mittee, or  that  this  legislation,  as  reported,  will  appear  before  a 
prejudiced  House. 

Mr.  Taliaferro.  I don’t  think  I do.  I think  you  are  open- 
minded  and  looking  for  information. 

Mr.  Kincheloe.  Absolutely. 

Mr.  Taliaferro.  Yes;  I believe  that. 

Mr.  Kincheloe.  I know  I am. 

Mr.  Taliaferro.  As  far  as  I know  this  whole  committee  is,  and  as 
far  as  I know  Congress  is.  But  the  results  are  the  same,  that  there 
has  been  and  there  is  a great  deal  of  tinkering  with  business  that 
might  have  better  been  left  alone. 

Mr.  Kincheloe.  Well,  now,  what  legislation  do  you  have  reference 
to  along  that  line  ? What  acts  have  Congress  passed  in  the  regulation 
of  public  utilities  of  this  country  and  other  business  that  you  think 
have  been  a great  abuse  to  the  public  and  a detriment  to  legitimate 
business  ? I am  asking  you  for  information.  I want  to  know. 

Mr.  Taliaferro.  I don’t  know  of  so  many  things  that  have  been 
passed,  but  so  many  negotiations  have  been  carried  on,  and  every- 
thing has  been  investigated,  it  has  been  upset,  it  has  been  harassed 
in  every  way  possible.  I have  been  down  here  a number  of  times; 
this  is  the  fourth  or  fifth  time  that  I have  left  my  business  and  come 
down  here  on  just  such  inquiries  as  this,  inquiries  that  have  been 
carried  forward  by  congressional  committees  of  different  kinds. 

Mr.  Kincheloe.  I can  remember,  in  my  short  life,  that  when  they 
undertook  to  regulate  the  insurance  business,  the  insurance  com- 

ganies  in  this  country,  that  business  went  up  in  the  air  and  said 
ongress  would  ruin  everybody.  I remember  when  the  Interstate 
Commerce  act  was  being  discussed — I don’t  know  that  I am  old 
enough  to  remember  when  it  was  adopted,  probably  I am — but  the 
railroads  of  the  country  said  that  “ whenever  you  undertake  to  regu- 
late the  railroads  by  such  a commission  as  the  Interstate  Commerce 
Commission,  why  you  will  force  the  railroads  out  of  business.”  When 
this  great  legislation  of  the  Department  of  Agriculture,  which  I think 
has  done  more  to  help  all  the  people  than  any  branch  of  our  Govern- 
ment, including  in  it  the  Bureau  of  Animal  Industry,  and  all  of  that, 
was  proposed,  they  said  that  that  would  ruin  us.  Well,  I don’t 
think  that  there  is  any  fair-minded  man  but  what  would  agree  that 
the  Bureau  of  Animal  Industry  has  done  a great  deal  in  this  country, 
has  been  of  great  value  to  the  country.  Don’t  you  think  so  ? 

Mr.  Taliaferro.  No  question  about  it.  I was  through  that.  The 
opposition  from  the  packers  at  that  time  was  not  the  fact  of  the  bill 
itself,  but  was  the  fact  that  they  should  be  saddled  with  the  expense 
of  condemnations,  which  amounts  to  a great  deal  of  money  in  the 
course  of  a year.  That  was  the  kind  of  a thing  that  we  were  inter- 
ested in.  Not  the  fact  but  what  the  public  should  be  conserved  and 
in  every  way  protected,  but  it  was  the  fact  that  the  loss  in  condemna- 
tions, which  the  packers  were  powerless  to  prevent,  should  not  be 
saddled  on  them.  I appeared  before  that  committee,  and  that  was 
the  stand  that  we  took. 


46985 — 21 -13 


194 


MEAT  PACKER. 


And  I will  say  that  there  is  no  department  of  this  great  Government 
of  ours  that  has  gotten  so  close  to  the  heart  of  the  people  and  so  near 
to  the  people  as  the  Agricultural  Department.  I have  great  respect 
for  it  and  great  affection  for  it,  and  I have  never,  in  all  my  appear- 
ances before  the  Agricultural  Committees,  found  anything  but  broad- 
minded men,  men  who  were  looking  for  the  truth  and  doing  the  right 
thing. 

Mr.  Tincher.  Were  you  opposed  to  the  Interstate  Commerce  law 
when  it  was  passed  ? 

Mr.  Taliaferro.  No,  sir. 

Mr.  Tincher.  You  thought  that  the  common  carriers  of  the 
country  were  at  a point  where  there  should  be  Government  regulation  ? 

Mr.  Taliaferro.  Well,  I wasn’t  so  very  anxious  for  them  to  be 
regulated,  because  I was  getting  rebates,  and  I wmuld  just  as  soon  have 
the  rebate.  As  long  as  everybody  was  getting  them  I wanted  to  get 
them.  But  when  they  stopped,  why  1 was  perfectly  satisfied,  be- 
cause then  I knew  that  there  wasn’t  anybody  getting  anything  better 
than  I was. 

Mr.  Tincher.  That  was  a really  vicious  practice,  to  rebate,  wasn’t  it  ? 

Mr.  Taliaferro.  We  didn’t  look  at  it  so  in  those  days.  But  it 
turned  out 

Mr.  Tincher  (interposing).  You  would  not  advocate  going  back 
to  that,  would  you  ? 

Mr.  Taliaferro.  But  it  turned  out  that  those  rebates  were  a 
boomerang,  because  there  is  always  some  other  packer  who  is  getting 
a bigger  rebate  than  you  are. 

Mr.  Tincher.  There  has  never  been  any  Government  regulation 
of  the  packing  industry? 

Mr.  Taliaferro.  Wliat  is  that? 

Mr.  Tincher.  There  never  has  been  any  Government  regulation  of 
the  packing  industry,  except  as  it  was  incidental  to  some  other  law  ? 

Mr.  Taliaferro.  Well,  when  the  Department  of  Agriculture  was 
created,  there  were  certain  regulations  issued  by  the  Secretary  that 
governed  the  operation  of  the  houses,  more  along  sanitary  lines  than 
any  other  line. 

Mr.  Tincher.  Well,  right  on  that  subject.  You  would  not  want 
to  return,  would  you,  to  the  oid  system  along  sanitary  lines  ? 

Mr.  Taliaferro.  By  no  means.  We  did  everything  we  possibly 
could  to  carry  out  sanitary  measures,  to  operate  our  own  house  along 
sanitary  lines,  but  we  didn’t  have  the  men  who  were  schooled  and 
educated  along  that  line,  as  we  did  afterwards,  when  we  had  men  who 
looked  for  things  that  we  knew  nothing  of. 

Mr.  Tincher.  So  that  was  a good  law  ? 

Mr.  Taliaferro.  Why,  it  has  proven  a very  satisfactory  law,  with 
the  exception  that  the  packers  are  still  paying  their  losses  for  con- 
demned live  stock,  which  I think  is  wrong. 

Mr.  Tincher.  Now  we  have  a law  known  as  the  Federal  Trade 
Commission  Act,  creating  a commission  that  has  power  to  make  cer- 
tain investigations  at  Government  expense,  and  report  on  those  in- 
vestigations, with  no  responsibility  or  power  for  curing  the  evils  that 
they  find.  Don’t  you  think  that  if  the  Federal  Trade  Commission  had 
the  responsibility  upon  it  to  cure  the  evil  that  it  discloses  in  terse  and 
tragic  language  in  these  reports,  that  perhaps  they  would  either  have 


MEAT  PACKER. 


195 


a tendency  to  not  make  such  reports,  or  to  get  rid  of  a good  many 
evils  that  they  mention  there? 

Mr.  Taliaferro.  I think  that  they  would  kill  the  patient. 

Mr.  Tincher.  Your  idea  is  that  they  would  put  the  packers  out  of 
business  if  they  had  the  regulating  of  the  business  ? 

Mr.  Taliaferro.  Well,  I wouldn’t  go  so  far  as  that,  Mr.  Congress- 
man, but  I would  say  that  if  the  Federal  Trade  Commission  had  any- 
thing to  do  with  the  operation  of  the  plants,  judging  from  the  reports 
that  they  have  made,  that  the  operation  of  the  plants  would  be 
increasingly  difficult  and  would  add  not  only  to  the  cost  to  the  con- 
sumer, but  it  would  make  the  business  itself  almost  impossible  to  run. 

Mr.  Tincher.  Well,  now,  would  you  favor  repealing  the  Federal 
Trade  Commission  Act  and  doing  away  with  that  commission  ? 

Mr.  Taliaferro.  No;  I would  not  repeal  it  if  they  would  confine 
themselves  to  doing  what,  as  I understand  it,  was  the  original  inten- 
tion, which  was  to  help  business  rather  than  to  hinder  it. 

Mr.  Tincher.  Well,  now,  do  you  think  this  principle  is  good,  that 
a Government  arm  should  have  the  power  to  make  investigation,  to 
report  conditions,  without  some  power  to  cure  those  bad  conditions  ? 

Mr.  Taliaferro.  Well,  it  appears  to  me  from  the  Federal  Trade 
Commission’s  reports,  that  they  have  not  found  anything.  They  have 
reported  a great  many  ex  parte  occurrences  that  perhaps  might,  from 
looking  at  one  side  of  them,  look  suspicious  to  people  who  do  not 
know  the  inside,  and  as  far  as  I can  see,  being  an  independent  packer 
and  tending  to  my  own  business,  they  have  gone  out  of  their  way  to 
cast  aspersions  on  the  industry,  and  as  far  as  I can  see,  have  done  no 
good,  and  in  fact,  have  done  harm. 

Mr,  Tincher.  Now,  conceding  for  the  purpose  of  this  question  that 
that  is  absolutely  true,  that  all  the  detrimental  findings  against  the 
packers  are  unfounded,  and  that  they  have  that  tendency  to  do  harm 
to  the  industry,  do  you  think  that  if  they  had  the  responsibility  of 
curing  the  evils  that  they  disclosed  by  these  reports,  that  they  could 
have  cured  those  evils  ? 

Mr.  Taliaferro.  They  could  not  have  cured  any  supposed  evils 
that  they  claimed  existed,  because  in  my  estimation  they  never 
existed.  But  granting  they  did  exist,  there  are  laws  upon  the 
statute  books  that  would  have  cured  them  quickly  and  promptly,  and 
had  the  commission  found  those  things  that  they  claimed  to  have 
found,  with  evidence  enough  to  have  backed  up  what  they  said  they 
found,  the  packers  would  have  been  in  the  penitentiary  to-day, 
because  there  are  laws  enough  to  put  them  there. 

Mr.  Tincher.  Well,  the  Attorney  General  says  that  he  had  an  in- 
vestigation made  as  the  result  of  these  findings,  and  that  his  investi- 
gators and  experts  reported  to  him  that  there  was  sufficient  evidence 
to  warrant  both  criminal  and  civil  prosecutions  against  the  packers, 
but  that  in  the  interest  of  the  business  and  the  country  in  general,  he 
entered  into  a consent  decree  with  the  packers. 

Now,  what  I am  trying  to  get  at  is  this : We  have,  to  the  extent  that 
the  Federal  Trade  Commission  is  authorized  to  go,  some  legislation 
pertaining  to  the  packers.  We  have,  to  the  extent  that  the  anti- 
trust laws  go,  some  legislation  pertaining  to  the  packers.  I wondered 
if  the  packers  are  not  engaging  in  evil  and  vile  practices,  and  the 
things  are  not  very  bright,  if  it  would  not  be  a good  time  to  have  a 


196 


MEAT  PACKER. 


constructive  law  that  would  have  a tendency  to  step  in  and  stabilize 
things  ? 

Mr.  Taliaferro.  Well  then,  Congressman,  why  don’t  they  change 
their  present  laws  ? What  is  the  use  of  doing  any  more  about  it  ? 

Mr.  Tincher.  Well,  any  law  passed  to  regulate  the  packer  and  re- 
place that  would,  of  necessity,  change  any  existing  laws.  For 
instance,  if  we  passed  a law  that  conflicted  in  any  way  with  the  decree, 
why,  the  decree  would  go  glimmering  to  just  that  extent,  because  the 
Congress  still  has  the  power  to  make  the  laws.  There  isn’t  any  such 
thing  as  making  a law  by  consent  decree  in  this  country. 

Mr.  Taliaferro.  But,  Congressman,  couldn’t  they  change  the 
laws  ? If  Congress  felt  that  the  present  laws  were  inadequate,  the 
Sherman  antitrust  law,  the  Clayton  law,  or  any  of  the  laws  which  had 
been  enacted,  couldn’t  they  amend  those  laws  so  as  to  cover  any 
supposed  or  any  possible  dereliction  that  might  occur  in  the  packer 
business,  as  well  as  any  other  business  ? 

Mr.  Tincher.  Well,  I will  give  you  the  reason,  and  I think  you  will 
agree  with  me.  That  the  packing  industry  is  too  big  an  institution 
and  has  too  many  ramifications,  too  many  complexions  for  any  man 
or  set  of  men  to  write  a law  enumerating  everything  that  they  can  do 
or  can  not  do,  to  be  properly  regulated.  Now,  secondly,  a technical 
violation  of  the  Federal  statute  by  Armour  & Co.  would  make  it  a 
crime,  and  that  could  be  tried  by  a jury  out  there  in  Chicago.  And 
I think  the  Government  has  had  some  little  experience  in  that,  and 
it  did  not  prove  very  successful. 

Now,  I don’t  understand  why,  if  the  packers  are  disposed  to  go  on 
and  engage  in  nothing  but  fair  practices,  they  would  not  welcome  a 
definite,  fixed  law  on  the  subject  of  their  industry. 

Mr.  Taliaferro.  Well,  Congressman,  any  legislation  that  might 
be  enacted  that  would  be  along  constructive  lines  would  be  welcomed 
by  Mr.  Armour  or  by  Mr.  Swift  or  by  Mr.  Morris,  or  any  other  packer 
in  the  country. 

Mr.  Tincher.  I assume  some  one  is  going  to  do  it,  but  I should 
think  the  most  valuable  testimony  that  this  committee  could  get 
would  be  from  some  one  who  would  take  one  of  the  bills  that  was 
pending  and  explain  how  it  would  affect  their  industry.  Now,  you 
have  mentioned  the  Haugen  bill.  I can’t  see  how  the  Haugen  bill  or, 
as  far  as  that  is  concerned,  the  McLaughlin  bill,  or  any  of  these  bills 
that  are  pending  here,  is  going  to  cripple  the  industry,  and  certainly  if 
one  of  those  bills  is  passed  the  industry  will  know  then  what  the  law 
is  and  what  they  are  going  to  do,  and  how  to  do  business. 

Mr.  Taliaferro.  Well,  Congressman,  there  is  no  man  in  the  pack- 
ing business  to-day  but  what  knows  what  is  wrong. 

Mr.  Tincher.  Yes. 

Mr.  Taliaferro.  Now,  if  he  is  wrong  he  should  suffer  for  it.  If 
he  is  right  he  should  be  let  alone.  Now,  there  is  nobody  in  this 
Congress  or  in  the  Federal  Trade  Commission  or  anywhere  else  that 
has  put  anything  on  the  packers  and  said,  “ You  are  guilty.”  It  can 
not  be  done.  Now,  they  have  got  first  to  prove  that  they  are  guilty, 
and  it  can  not  be  done,  because  they  are  not  guilty. 

Mr.  Tincher.  Well,  now,  I will  be  frank  with  you.  I can  not 
understand  how  any  well-informed,  good  business  man  who  is  at  all 
familiar  with  the  history  of  the  Five  Big  Packers  and  their  different 
troubles  and  their  different  organizations  can  place  his  unqualified 
stamp  of  approval  upon  their  past  conduct. 


MEAT  PACKER. 


197 


Mr.  Taliaferro.  Their  past  conduct,  things  that  have  passed,  that 
is  true.  There  have  been  in  all  businesses  in  times  past  things  that 
have  looked  legal  and  were  legal  at  the  time,  which  have  afterwards 
been  determined  by  our  legislators  to  be  illegal.  Well,  now,  I believe 
that  the  packers  are  a law-abiding  body  of  men.  I don’t  believe  they 
want  at  any  time  to  do  anything  against  the  laws  of  this  country. 

Mr.  Tincher.  Well,  we  do;  just  on  that  proposition,  while  you 
were  accepting  rebates  from  the  railroad  company  you  thought  it 
was  all  right  ? 

Mr.  Taliaferro.  That  was  legal  at  the  time,  too. 

Mr.  Tincher.  It  was  legal  ? 

Mr.  Taliaferro.  Yes. 

Mr.  Tincher.  But  can  you  conceive  now  of  anything  more  detri- 
mental to  good  government  and  fair  dealing  and  fair  play  among  the 
people  of  this  Nation  than  the  common  carriers  of  this  country 
granting  rebates  to  a class  of  men  to  build  up  their  business  and 
destroy  another  class  of  business  ? 

Mr.  Taliaferro.  At  the  time  that  those  rebates  were  given  it  was 
perfectly  good  business. 

Mr.  Clague.  That  does  not  answer  his  question  at  all. 

Mr.  Taliaferro.  Now,  when  we  look  at  it,  we  find  that  it  was 
not  the  proper  way  to  do  business. 

Mr.  Tincher.  Oh,  well,  when  they  settled  personal  difficulties  by 
the  duel  I suppose  at  those  times  they  thought  that  was  the  best 
way  to  settle  those  difficulties. 

Mr.  Taliaferro.  Undoubtedly. 

Mr.  Tincher.  But  the  law  came  along  and  said  that  that  was 
unlawful. 

Mr.  Taliaferro.  Then  they  stopped. 

Mr.  Tincher.  Yes.  Now,  we  can  not  say  that  because  those  things 
happened  in  the  past  we  can  not  take  them  into  consideration  in 
passing  a law,  because  everything  that  this  committee  will  ever  get 
notice  of  will  have  been  in  the  past.  We  can  not  have  any  notice  of 
what  these  packers  are  going  to  do  in  the  future.  They  have  been 
pretty  successful  in  the  past  in  jumping  from  one  method  and  tactic 
and  organizing  a new  controlling  body  to  do  whatever  was  attacked. 
I don’t  know,  but  it  seems  to  me  that  if  they  were  going  ahead  on  a 
fair  proposition  and  wanted  the  people  to  know  that  they  were, 
that  it  is  about  time" that  they  would  say,  “We  want  a reasonable, 
constructive  law  for  our  Government.” 

Mr.  Taliaferro.  There  I am  with  you  body  and  soul,  Congress- 
man, because  anything  that  is  constructive  is  right,  and  I am  with  you. 

Mr.  Tincher.  Well,  then  I will  recommend  to  you  for  your  earnest 
consideration  the  McLaughlin  bill  and  the  Haugen  bill  and  the  Wil- 
liams bill  and  the  Anderson  bill,  and  you  give  them  careful  study, 
because  I know  that  not  one  of  these  gentlemen  is  seeking  to  destroy 
this  great  industry,  and  they  are  in  the  body  that  they  are  in  to-day 
by  reason  of  their  reputation  at  home  for  being  great  constructive 
men. 

Mr.  Taliaferro.  That  is  what  we  have  you  here  for,  Congressman. 

The  Chairman.  Any  more  questions  to  be  asked  ? 

Mr.  Voigt.  Now  you  say  that  you  haven’t  any  doubt  that  the  big 
packers  would  welcome  constructive  legislation,  as  you  call  it? 

Mr.  Taliaferro.  Yes,  Congressman. 


198 


MEAT  PACKER. 


Mr.  Voigt.  That  being  true,  why  aren’t  these  gentlemen  here  to 
recommend  some  legislation  ? 

Mr.  Taliaferro.  Well,  I haven’t  seen  any  legislation  that  I 
thought  was  constructive,  yet,  Congressman. 

Mr.  Voigt.  No;  but  I say  that  you  say  the  packers  would  wel- 
come it. 

Mr.  Taliaferro.  Yes. 

Mr.  Voigt.  Why,  if  so,  don’t  they  come  here  and  make  their 
wishes  known  ? 

Mr.  Taliaferro.  Well,  I think  they  are  here.  I see  most  of  them 
here.  I believe  they  are  here. 

Mr.  Voigt.  But  they  are  not  here  recommending  any  legislation. 
They  are  opposing  all  legislation,  but  are  not  recommending  any. 

Mr.  Taliaferro.  Well,  the  legislation  that  I would  suggest  is  to 
strike  out  everything  from  the  enacting  clause  in  all  of  the  bills. 

Mr.  Voigt.  You  think  that  would  be  constructive  legislation  ? 

Mr.  Taliaferro.  I think  so. 

Mr.  Voigt.  Well  now,  you  said  that  you  would  agree  on  con- 
structive legislation,  in  answer  to  a question  by  Mr.  Tincher.  Now 
have  you  any  suggestion  to  make  as  to  what  legislation  should  be 
passed  ? 

Mr.  Taliaferro.  Well,  if  legislation  is  necessary,  I would  suggest 
that  the  Haugen  bill  comes  nearer  to  being  constructive  than  any  of 
the  other  bills. 

Mr.  Voigt.  Well,  don’t  qualify  it  now  by  saying  -‘if  any  legislation 
is  necessary.”  I am  asking  you  now  whether  you  have  anything  to 
suggest  ? 

Mr.  Taliaferro.  Have  I ? 

Mr.  Voigt.  Yes. 

Mr.  Taliaferro.  I have  nothing  to  suggest  that  legislation  could 
correct. 

Mr.  Voigt.  Then  you  are  not  in  favor  of  any  legislation  on  this 
subject,  Mr.  Taliaferro,  are  you? 

Mr.  Taliaferro.  I don’t  think  it  is  necessary. 

Mr.  Voigt.  You  don’t  think  it  is  necessary  ? 

Mr.  Taliaferro.  No. 

Mr.  Voigt.  You  know  that  the  Big  Five  at  Chicago  give  informa- 
tion to  each  other  as  to  the  qualities  and  kinds  of  live  animals  pur- 
chased by  them  ? 

Mr.  Taliaferro.  I don’t  know,  but  I should  think  they  would, 
because  I don’t  see  how  business  could  be  operated  without  it. 

Mr.  Voigt.  Do  you  think  that  it  is  customary  for  men  who  are 
competitors  in  a certain  line  of  business  to  give  each  other  information 
as  to  the  details  of  their  business  ? 

Mr.  Taliaferro.  I think  all  business  has  to  do  that  more  or  less  to 
survive. 

Mr.  Voigt.  Do  you,  in  your  business,  give  information  to  any 
competitor  ? 

Mr.  Taliaferro.  I certainly  do. 

Mr.  Voigt.  What  is  the  nature  of  the  information  ? 

Mr.  Taliaferro.  I always  tell  them  how  many  hogs  I buy,  or  how 
many  cattle  I buy.  They  all  know  it,  because  it  is  published;  but  if 
a man  asks  me  how  many  I bought  I have  nothing  to  conceal.  I have 
nothing  to  conceal  in  my  own  business  from  anybody. 


MEAT  PACKER. 


199 


Mr.  Voigt.  Do  you  make  a daily  or  weekly  report  to  your  com- 
petitors ? 

Mr.  Taliaferro.  I do  not. 

Mr.  Voigt.  Do  you  make  such  a report  in  writing  ? 

Mr.  Taliaferro.  I do  not  make  any  report  to  any  of  my  com- 
petitors, but  any  competitor  who  asks  me  for  information  I gladly 
give  it  to  him. 

Mr.  Voigt.  Don’t  you  think  that  it  calls  for  suspicion  that  these 
gentlemen  make  reports  to  each  other,  in  writing,  at  stated  times  ? 

Mr.  Taliaferro.  If  a man  is  of  a suspicious  mind,  I should  say  yes. 

Mr.  Voigt.  Well,  now,  you  haven’t  seen  the  necessity  for  that  in 
your  business  ? 

Mr.  Taliaferro.  I might  on  an  occasion;  there  might  be  times 
when  it  would  be  of  mutual  benefit,  and  I might  do  so.  I never  ask 
for  the  information  except  for  my  own  benefit,  and  I never  give  any 
man  any  information  except  when  he  asks  for  it. 

Mr.  Voigt.  You  have  never  seriously  considered  the  proposition 
of  making  weekly  reports  of  your  business  to  your  competitors  and 
having  them  make  the  same  to  you  ? 

Mr.  Taliaferro.  I never  do,  but  if  a man  asks  me  for  it  I will  give 
it  to  him. 

Mr.  Voigt.  You  are  giving  information  to  competitors  by  word  of 
mouth,  possibly? 

Mr.  Taliaferro.  I give  it  not  only  to  my  competitors,  but  to 
anybody  that  asks  for  it  that  has  interest  enough  in  it  to  ask. 

Mr.  Voigt.  Well,  now,  let  us  go  into  some  other  line  of  business. 
Suppose  there  are  a dozen  wholesale  grocers  in  the  city  of  Washington 
and  one  of  these  grocers  would  go  to  the  other  and  ask  him  to  make  a 
written  report  to  him  once  a week  of  the  amount  of  his  purchases, 
the  character  of  the  goods  purchased,  the  price  paid  for  them,  and  the 
character  of  sales  and  the  amount  obtained.  Do  you  think  that  the 
other  nine  grocers  would  furnish  this  information  ? 

Mr.  Taliaferro.  I don’t  think  so. 

Mr.  Voigt.  Why  not  ? 

Mr.  Taliaferro.  Because  I don’t  think  it  is  any  of  their  business. 

Mr.  Voigt.  Well,  now,  then,  why  should  it  be  different  in  the  pack- 
ing industry  than  it  is  in  the  grocery  industry? 

Mr.  Taliaferro.  Because  a man  never  asks  that  question.  A man 
asks  you  how  many  hogs  you  bought,  or  how  many  cattle  you  bought, 
or  some  information  that  he  wants,  but  he  doesn’t  go  into  the  details 
of  your  business. 

Mr.  Voigt.  But  the  packers  furnish  information  of  the  exact  num- 
ber bought. 

Mr.  Taliaferro.  That  is  public. 

Mr.  Voigt.  They  furnish  that  information  in  each  class,  and  the 
amount  bought. 

Mr.  Taliaferro.  That  is  public  information,  Congressman.  Every- 
body can  get  that.  I can  get  it  without  going  to  Armour  or  to  Swift 
or  to  Morris,  and  know  just  what  they  buy  every  day. 

Mr.  Voigt.  Now,  if  that  is  public  information,  then  why  do  these 
packers  go  to  the  useless  task  of  furnishing  this  information  to  each 
other  in  writing  ? 


200 


MEAT  PACKER. 


Mr.  Taliaferro.  You  will  have  to  ask  those  packers.  I don’t 
know. 

Mr.  Voigt.  Well,  I am  asking  you  now. 

Mr.  Taliaferro.  I don’t  know  that  they  do. 

Mr.  Voigt.  Well,  assuming  they  do,  don’t  you  think  that  it  is 
a useless  performance,  from  your  standpoint  ? 

Mr.  Taliaferro.  It  would  be  for  me. 

Mr.  Voigt.  You  would  not  admit  that  these  gentlemen  go  through 
a useless  performance,  would  you  ? 

Mr.  Taliaferro.  I would  not  admit  from  my  standpoint.  I don’t 
know  why  they  would  ask  the  information.  And  I don’t  know  that 
they  do  ask  it. 

Mr.  Voigt.  Do  you  know  the  five  packers,  so  far  as  the  percentage 
of  their  purchases  are  concerned,  as  among  themselves,  have  stood 
stationary  for  many  years  back? 

Mr.  Taliaferro.  Well,  from  the  nature  of  the  business  it  must  be 
so,  although  I don’t  think  that  it  is  actually  so.  It  may  be  approxi- 
mately so,  because  one  man  is  not  going  to  let  another  man  get  more 
than  he  would,  because  if  he  does  this  business  would  outgrow  him. 
Each  man  is  competing  and  trying  to  get  his  full  proportion  of  the 
live  stock  that  comes  and  that  he  can  handle. 

Mr.  Voigt.  Then  it  is  your  theory  that  the  five  big  packers,  if  they 
are  operating  under  usual  economic  and  business  laws,  must  remain 
stationary  for  many  years  to  come  ? 

Mr.  Taliaferro.  They  would  not  remain  stationary,  but  they 
would  probably  see  that  the  other  fellow  did  not  get  more  than  they 
did. 

Mr.  Voigt.  Well,  now,  if  each  one  of  the  five  sees  to  it  that  the 
other  fellow  gets  no  more,  then  they  are  bound  to  remain  stationary, 
are  they  not  ? 

Mr.  Taliaferro.  Not  stationary.  It  depends  entirely  on  the 
amount  of  stock  available.  If  there  are  100,000  head  of  hogs  they 
would  get  more  than  if  there  were  20,000  head  of  hogs. 

Mr.  Voigt.  No;  what  I refer  to  is  the  percentage  of  these  five 
packers  among  themselves.  If  there  are  50,000  hogs  and  one  packer 
gets  30  per  cent,  he  would  get  15,000,  and  if  there  were  100,000  hogs 
he  would  get  30,000.  But  what  I am  referring  to  now  is  the  percent- 
age among  themselves.  Has  that  ever  struck  you  as  being  abnor- 
mal ? 

Mr.  Taliaferro.  No;  it  has  not.  It  strikes  me  as  being  a business 
proposition,  and  that  each  man  figures  on  getting  the  amount  that 
he  needs.  I know  in  our  own  business,  suppose  the  receipts  for  the 
day  shoud  be  10,000  hogs.  Now  there  are  three  large  independent 
packers  up  there.  I would  say  that  we  would  probably  try  to  get 
anywhere  from  25  to  35  per  cent.  We  would  think  that  we  would  be 
entitled  to  about  one-third  of  the  receipts.  The  others  would  feel 
that  way.  If  one  man  got  50  per  cent  of  the  receipts,  why  we  would 
feel  that  he  was  trying  to  hog  it,  and  the  next  day  I would  try  to  get 
50  per  cent. 

Mr.  Voigt.  Now,  assume  that  these  packers  have  remained  at  this 
figure  among  themselves  for  the  last  30  years,  would  that  strike  you 
as  unusual  ? 

Mr.  Taliaferro.  Not  at  all,  not  at  all. 

Mr.  Voigt.  It  would  not  ? 


MEAT  PACKER. 


201 


Mr.  Taliaferro.  No. 

Mr.  Voigt.  Then  you  think  it  is  absolutely  normal  that  these  five 
concerns,  as  among  themselves,  should  and  have  almost  run  a neck 
and  neck  race  ? 

Mr.  Taliaferro.  They  will  run  it  as  long  as  the  business  exists. 

Mr.  Voigt.  Now,  let  me  ask  you  this  question.  There  was  a time 
in  the  packing  industry  when  one  outstripped  the  other,  was  there 
not  ? 

Mr.  Taliaferro.  Well,  as  far  as  I can  see  they  have  been  trying 
to  outstrip  each  other  ever  since  I have  been  in  the  business. 

Mr.  Voigt.  Well,  Swift  to-day  is  about  three  times  the  size  of 
Cudahy,  roughly  speaking. 

Mr.  Taliaferro.  Well,  I should  imagine  pretty  close  to  that. 

Mr.  Voigt.  Now  when,  in  your  judgment,  in  the  packing  industry 
did  Swift  advance  beyond  Cudahy  ? 

Mr.  Taliaferro.  Why,  he  always  has  been  larger  than  Cudahy. 
He  started  in  business  before  Cudahy. 

Mr.  Voigt.  There  was  a time  when  Swift  wasn’t  any  larger  than 
Cudahy  is  now,  wasn’t  there? 

Mr.  Taliaferro.  Oh,  yes. 

Mr.  Voigt.  Well,  now,  there  must  have  been  a time  when  one  over- 
took the  other. 

Mr.  Taliaferro.  Well,  Swift  was  a good  deal  larger  than  Cudahy 
is  now  before  Cudahy  even  started  in  business. 

Mr.  Voigt.  Then  you  think  there  is  absolutely  no  possibility  that 
the  Cudahy  packing  business  may  become  at  some  time  as  large  as 
the  Swift  business? 

Mr.  Taliaferro.  Oh,  I don’t  say  that  there  isn’t  any  possibility 
of  it,  but  I should  say  that  the  country  would  have  to  be  very  much 
larger  to  enable  them  to  do  it. 

Mr.  Voigt.  Well,  now,  they  have  been  going  on  this  way  for  30 
years,  and  there  isn’t  a difference  of  1 per  cent  among  these  gentle- 
men; that  is,  among  themselves.  Now,  if  that  continues  for  another 
30  years,  then,  according  to  your  theory,  they  will  be  exactly  where 
they  are  to-day  ? 

Mr.  Taliaferro.  I think  that  that  is  the  only  way  that  the  pack- 
ing business  will  ever  be  operated  in  this  country.  That  each  packer 
will  try  to  get  all  that  he  can  get.  The  larger  a packer  is  the  more 
of  the  territory  he  covers.  If  a man  has  got  a branch  house  in  a town 
that  only  has  trade  enough  for  one  branch  house  another  man  is 
not  going  to  put  a branch  house  in  there,  because  there  is  no  trade 
there  for  him. 

Mr.  Voigt.  Then  you  think  it  is  all  right  for  five  competitors  in 
business  to  stay  exactly  where  they  are  for  30  years  and  have 
nothing  wrong  ? 

Mr.  Taliaferro.  I think  approximately,  yes.  There  may  be 
some  that  outstrip  the  others.  They  haven’t  all  kept  the  same 
percentage,  Congressman. 

Mr.  Voigt.  But,  my  dear  sir,  I think  the  figures  show  that  these 
five  big  packers  have  stood  at  this  same  percentage  for  all  these 
years. 

Mr.  Taliaferro.  I beg  your  pardon,  they  have  not  stood  at  the 
same  percentage,  because  there  have  been  new  ones  coming  in. 


202 


MEAT  PACKER. 


Wilson  has  come  in,  for  instance.  The  Cudahys  came  in  after 
Swift. 

Mr.  Voigt.  Yes,  but  Wilson  was  the  successor  to  Sulzberger. 

Mr.  Taliaferro.  Yes,  but  he  has  grown  very  considerably  since 
he  came  in.  He  has  made  wonderful  strides  since  he  has  entered 
the  packing  business. 

Mr.  Voigt.  You  think  that  his  percentage  is  bigger  than  was  the 
percentage  of  the  stock  of  Sulzberger? 

Mr.  Taliaferro.  I think  that  the  amount  of  business  that  he  has 
done  is  larger  than  Sulzberger’s. 

Mr.  Voigt.  I am  not  talking  about  the  amount  of  business.  They 
have  all  done  a larger  business.  But  I am  talking  now  about  the 
percentage  among  themselves. 

Mr.  Taliaferro.  I think  his  percentage  is  very  much  greater;  in 
fact,  I know  it  is. 

Mr.  Voigt.  Have  you  seen  any  figures  on  it  ? 

Mr.  Taliaferro.  Yes,  I have.  I have  seen  only  the  reports  that 
come  out  in  his  yearbook.  That  is  all  I look  at.  I see  the  yearbooks 
of  all  the  packers,  showing  the  amount  of  business  they  do. 

Mr.  Voigt.  Were  you  here  this  morning  when  this  50-50  agreement 
at  Denver  was  talked  about,  between  Swift  and  Armour? 

Mr.  Taliaferro.  Yes,  I was  here. 

Mr.  Voigt.  What  do  you  think  about  that  ? 

Mr.  Taliaferro.  Well,  I think  that  is  perfectly  natural. 

Mr.  Voigt.  You  see  nothing  wrong  about  that? 

Mr.  Taliaferro.  No,  the  houses  were  about  the  same  capacity. 
They  would  naturally  feel  that  they  ought  to  have  about  the  same 
amount  of  business.  Their  overhead  is  about  the  same;  their  ex- 
pense is  about  the  same.  A man  would  naturally  feel  that  he  ought 
to  have  as  much  as  is  possible,  in  accordance  with  his  capacity. 
Now,  as  I understand  at  Denver — and  I know  Denver  pretty  well — 
the  houses  at  that  time  were  about  the  same  capacity.  There  was 
very  little  difference  between  them.  Naturally,  they  would  want 
about  half  of  the  receipts,  which  is  perfectly  natural. 

Mr.  Jones.  Now  just  there,  do  you  think  it  is  possible  for  them  to 
stay  at  those  same  percentages  without  having  an  agreement  among 
themselves  as  to  the  amount  they  are  going  to  pay  for  stock,  before 
they  bid  on  it  ? 

Mr.  Taliaferro.  Yes,  Mr.  Jones. 

Mr.  Jones.  You  don’t  think  they  have  competitive  bidding  among 
themselves  ? 

Mr.  Taliaferro.  Yes;  they  have  competitive  bidding  among  them- 
selves. 

Mr.  Jones.  You  know'  they  have? 

Mr.  Taliaferro.  I know  they  have.  If  it  was  not  so,  I would  be 
buying  hogs  at  a profit  to-day  instead  of  a loss. 

Mr.  Jones.  What  is  the  use  of  their  having  competitive  bidding 
if  they  are  going  to  parcel  it  out  among  themselves  according  to 
more  or  less  fixed  percentages  ? 

Mr.  Taliaferro.  Because  there  are  too  many  competitors  in  the 
field. 

Mr.  Jones.  I mean  as  between  themselves,  these  men  that  parcel 
it  out;  couldn’t  they  just  get  together  and  agree  as  to  the  price  they 


MEAT  PACKER. 


203 


were  going  to  pay  for  animals  that  day,  and  agree  not  to  bid  against 
each  other  and  thus  fix  the  price  at  a lower  level  ? 

Mr.  Taliaferro.  Oh,  such  a thing  as  that  might  be  possible,  but 
I don’t  believe  it  could  be  possible;  no. 

Mr.  Jones.  Well,  you  couldn’t  well  change  the  fixed  percentage 
without  having  that  agreement,  could  you  ? 

Mr.  Taliaferro.  Oh,  you  could  buy  half  and  half  of  the  receipts 
and  still  be  in  great  competition  with  each  other.  The  matter  of 
buying  half  of  the  receipts  does  not  eliminate  competition,  because 
there  is  competition  all  the  time. 

Mr.  Jones.  Well,  suppose  the  amount  of  stock  in  a certain  locality 
adjacent  to  one  of  these  packing  houses,  or  where  two  of  these  pack- 
ing houses  were  in  competition,  two  branches  of  two  of  the  big  pack- 
ers, was  not  sufficient  for  both  of  them  to  have  it  when  they  wanted. 
Then  naturally  if  they  did  not  have  an  agreement  beforehand,  they 
would  run  the  price  of  stock  up  there,  wouldn’t  they? 

Mr.  Taliaferro.  Not  necessarily,  because  if  the}7  could  buy  it 
cheaper  elsewhere  they  would  not  buy  it  there. 

Mr.  Jones.  Well,  if  they  buy  the  stock  that  is  to  be  bought  there, 
however,  they  tvould  not  make  the  same  bid  on  this  stock  without 
a previous  agreement,  would  they  ? 

Mr.  Taliaferro.  Oh,  no;  they  seldom  make  the  same  bids  on 
products. 

Mr.  Jones.  Well,  they  are  substantially  the  same,  aren’t  they? 

Mr.  Taliaferro.  Well,  if  the  quality  is  the  same,  why  the  only 
difference  would  be  in  a man’s  idea  of  how  much  different  cargoes 
or  a load  would  dress.  One  man  might  think  it  would  dress  50  per 
cent  and  the  other  might  think  it  would  dress  58  per  cent,  and  there 
probably  would  be  25  cents  a hundred  difference  in  the  price  they 
would  pay. 

Mr.  Jones.  They  never  have  bid  where  they  run  their  stock  up 
considerably  ? 

Mr.  Taliaferro.  As  a usual  proposition,  Mr.  Jones,  a packer  bids 
what  he  thinks  the  product  is  worth. 

Mr.  Jones.  All  he  thinks  it  is  worth? 

Mr.  Taliaferro.  Well,  he  sometimes  may  be  forced  to  raise  his 
bid.  He  wants  to  buy  it  as  cheap  as  he  can.  And  he  will  not  buy  it 
any  higher  unless  somebody  else  or  some  other  market  comes  in  and 
bids  higher. 

Mr.  Voigt.  Will  you  let  me  interrupt? 

Mr.  Jones.  Go  ahead. 

Mr.  Voigt.  Now,  you  say  if  the  two  plants  of  two  packers  at  an 
important  point  are  about  the  same  size  they  would  each  take  50 
per  cent  of  what  is  offered  ? 

Mr.  Taliaferro.  They  will  try  to  each  take  50  per  cent  of  what  is 
offered. 

Mr.  Voigt.  Now,  let  me  read  you  again  from  this  Armour  letter 
that  I referred  to  this  morning.  Mr.  Armour,  writing  to  his  uncle, 
says: 

Swift  plant,  from  wliat  I hear,  and  from  the  little  1 saw  of  it,  is  far  ahead  of  ours 
both  as  to  the  size  and  con  Jit-ion.  Of  course,  as  you  kno  v,  everything  here  is  done  on 
a fifty-fifty  basis,  and  with  facilities  we  have  it  is  almost  impossible  to  keep  up  this 
ratio. 


204 


MEAT  PACKER. 


Now  then,  under  normal  economic  conditions,  wouldn’t  the  Swift 
plant  take  more  than  50  per  cent  of  the  offerings  in  that  market  ? 

Mr.  Taliaferro.  Under  normal  conditions  ? 

Mr.  Voigt.  Yes. 

Mr.  Taliaferro.  Not  if  their  plants  were  about  of  equal  capacity. 

Mr.  Voigt.  But  he  says  in  his  letter  here  that  “the  Swift  plant, 
both  as  to  size  and  condition,  is  ahead  of  ours.” 

Mr.  Taliaferro.  But  in  a proposition  of  that  kind  it  may  be  pos- 
sible that  Swift’s  house  may  not  be  able  to  handle  any  more. 

Mr.  Voigt.  But  he  did  not  say  in  this  letter  that  they  were  not 
able  to  handle  it.  He  said  it  was  a hard  thing  for  them  to  keep  up 
the  fifty-fifty  because  the  Swift  plant  was  so  much  larger. 

Mr.  Taliaferro.  Did  Armour  try  to  keep  up  to  the  fifty-fifty, 
and  try  to  hold  up  his  end  of  the  agreement  ? 

Mr.  Voigt.  Yes. 

Mr.  Taliaferro.  He  tried  to  keep  up  ? 

Mr.  Voigt.  But  why  couldn’t  the  other  fellow  get  more  than 
50  per  cent  when  his  plant  was  better  and  larger?  That  is  what  I 
would  want  to  know. 

Mr.  Taliaferro.  Well,  I would  ask  Mr.  Swift. 

Mr.  Voigt.  Well,  I am  asking  you. 

Mr.  Taliaferro.  Well,  I would  ask  Mr.  Swift  or  Mr.  Armour.  I 
wasn’t  running  the  plant.  I wouldn’t  know  whether  they  did  or  did 
not  buy  more  or  less.  I wasn’t  there.  I didn’t  have  anything  to  do 
with  it.  Now  the  question  you  ask  is  a question  that  should  be 
asked  of  the  man  that  did  it. 

Mr.  Voigt.  But  you  have  testified  here,  my  dear  sir,  that  you  don’t 
see  anything  unusual  in  this  arrangement.  Now  I am  asking  you  if 
you  have  changed  your  mind  ? 

Mr.  Taliaferro.  I have  not  changed  my  mind. 

Mr.  Voigt.  Then  in  your  judgment  it  doesn’t  make  any  difference 
how  big  the  Swift  plant  was  at  that  point,  or  how  big  the  Armour 
plant  was,  they  would  always  divide  up  fifty-fifty  ? 

Mr.  Taliaferro.  Not  necessarily.  They  would  try  to  keep  their 
overhead  down,  and  a man  would  try  to  get  every  hog  he  could  use, 
and  every  head  of  cattle.  And  if  they  divided  it  fifty-fifty,  as  long 
as  they  could  keep  their  overhead  down  and  their  plant  down,  why  I 
don’t  think  they  should  not  do  it. 

Mr.  Ten  Eyck.  May  I ask  a question  right  here?  If  the  policy  of 
Mr.  Cudahy’s  management  should  change,  and  they  decided  that 
they  wanted  to  be  as  large  as  Swift,  which  is  liable  to  happen  at  any 
time  if  an  ambitious  man  got  in  control,  and  he  started  out  to  do  that, 
what  effect  would  that  have  upon  the  markets  where  Swift  and 
Cudahy  purchase  in  the  stockyards  ? 

Mr.  Taliaferro.  Well,  if  they  were  both  bidding  with  each  other 
unduly  they  would  force  the  prices  up.  But  they  would  not  buy 
there  if  they  could  buy  them  cheaper  elsewhere. 

Mr.  Kincheloe.  Mr.  Taliaferro,  if  a practice  was  resorted  to  by 
the  packers  whereby  they  had  a room  rented,  the  rent  of  which  was 
paid  for  in  proportion  to  the  amount  of  dressed  beef  produced  by 
each  one  of  them,  and  they  had  an  expert  man  there,  and  they  were 
to  meet  weekly,  and  at  this  meeting  divide  the  territory  and  the 
volume  of  business  that  was  to  be  done  in  each,  and  providing  a 


MEAT  PACKER. 


205 


penalty  for  those  who  violated  it,  do  you  think  that  that  could  be  in 
the  interest  of  the  public  at  large  ? 

Mr..  Taliaferro.  In  a general  way,  yes. 

Mr.  Kincheloe.  Well,  if  it  was  not  going  to  help  the  packer  there 
by  dividing  this  territory  and  the  volume  of  this  business,  where 
they  could  buy  the  stuff  from  the  producer  cheaper,  why  would  they 
lay  off  this  territory  and  fix  this  business  in  exact  proportions  ? 

Mr.  Taliaferro.  I don’t  know  that  they  do. 

Mr.  Kincheloe.  T am  saying:  “If  that  would  happen.” 

Mr.  Taliaferro.  Why  would  they? 

Mr.  Kinchoe.  No;  would  you  approve  of  that  kind  of  a business, 
these  five  fellows  having  a room  to  meet  every  week  and  have  an 
expert  there  to  lay  off  the  territory  and  the  volume  of  business  that 
is  to  be  done  by  each  one  in  these  territories,  and  provide  a penalty 
for  any  of  these  packers  that  would  violate  or  encroach  over  on  the 
territory  of  the  other,  or  buy  up  in  excess  of  his  proportion  of  the 
amount  of  business,  do  you  think  that  is  a straight,  open  and  above 
board  business  ? 

Mr.  Taliaferro.  No,  I don’t. 

Mr.  Kincheloe.  You  would  not  approve  of  that  kind  of  practice, 
would  you,  Mr.  Taliaferro  ? 

Mr.  Taliaferro.  No,  I would  not. 

Mr.  Kincheloe.  Well,  don’t  you  think  that  if  that  practice  does 
prevail,  has  prevailed  and  is  likely  to  prevail,  that  it  would  be  a very 
salutary  thing  to  have  an  act  passed  by  the  Congress  of  the  Nation 
to  forbid  those  things  ? 

Mr.  Taliaferro.  Yes,  I think  an  act  of  Congress  was  necessary  to 
prevent  a thing  of  that  kind  occurring;  I think  it  would  be  a good 
thing  to  do.  But  I don’t  think  that  it  is  possible  to  do  it.  It  might 
have  been  in  times  past,  Congressman,  that  such  things  as  that  might 
have  happened,  but  I don’t  think  it  is  possible  in  these  days. 

Mr.  Kincheloe.  Well,  now  you  say  it  is  not  possible? 

Mr.  Taliaferro.  No,  I don’t  think  so. 

Mr.  Kincheloe.  If,  as  a matter  of  fact,  you  and  I and  three  other 
packers  were  to  control  84  per  cent  of  the  business  that  went  into 
interstate  commerce  in  a year — you  say  you  don’t  think  it  is  possible 
to  happen — what  is  the  reason  we  could  not  get  together  in  that 
arrangement;  what  is  the  reason  we  could  not  absolutely  control 
the  market.  How  much  effect  on  the  market  would  16  per  cent  of 
the  independent  packers  have  upon  what  we  do  in  collusion  in  a 
matter  of  that  kind  ? 

Mr.  Taliaferro.  Well,  in  the  first  place  they  don’t  do  84  per  cent 
of  the  business. 

Mr.  Kincheloe.  Of  interstate  commerce  business? 

Mr.  Taliaferro.  Yes. 

Mr.  Kincheloe.  Well,  now,  why  do  you  say  that?  I want  to 
know,  to  get  at  what  you  base  that  opinion  on,  because  the  report 
of  this  Federal  Trade  Commission  says  that  they  do. 

Mr.  Taliaferro.  There  is  too  much  local  killing.  In  Detroit, 
alone,  we  kill  1,000,000  hogs  a year,  and  there  isn’t  any  big  packer  in 
that  town. 

Mr.  Kincheloe.  Well,  then,  that  doesn’t  go  interstate. 

Mr.  Taliaferro.  Oh,  yes,  I beg  your  pardon,  80  per  cent  of  that 
goes  interstate.  The  hogs  come  into  Detroit,  and  we  buy  the  hogs  all 


206 


MEAT  PACKER. 


over  the  country;  they  come  into  Detroit,  and  the  large  percentage 
of  it  goes  out  again,  but  it  is  slaughtered  in  Detroit.  Well,  now, 
no  big  packer  has  any  packing  house  there.  Of  the  cattle — of  the 
dressed  beef  that  is  sold  in  the  city  of  Detroit,  66  per  cent  of  it  is 
killed  by  local  people,  and  the  small  packers  that  haven’t  any  Govern- 
ment inspection  at  all. 

Mr.  Kincheloe.  Granting  that  that  is  true,  but  you  are  speaking 
of  one  place. 

Mr.  Taliaferro.  Well,  take  other  places  for  instance.  Take 
Baltimore,  or  we  will  take  Buffalo.  There  is  not  a big  packer  in 
Buffalo.  The  big  independent  packers  are  there,  but  there  is  none 
of  the  Big  Five  there.  Of  all  the  stock  that  is  slaughtered  in  Buffalo, 
there  is  not  a pound  of  it  slaughtered  by  the  big  packers. 

Now,  in  reference  to  this  bugaboo  about  their  shipping  84  per  cent, 
Congressman,  why  it  is  misleading,  and  it  looks  bad  on  paper,  but 
there  is  nothing  to  it  when  you  get  down  to  the  bottom  of  it. 

Mr.  Kincheloe.  Well  now,  why  should  they  be  likely  to  be  mis- 
taken about  that  matter,  taking  the  national  view  of  it  ? 

Mr.  Taliaferro.  The  big  packers  don’t  cut  any  figure  in  Detroit. 

Mr.  Kincheloe.  I am  not  talking  about  that,  I am  talking  about 
the  whole  country  for  a year. 

Mr.  Taliaferro.  But  take  Buffalo,  take  Detroit,  take  Pittsburgh, 
take  Baltimore,  or  Minneapolis,  or  Philadelphia  or  Cleveland — well, 
they  have  a little  house  in  Cleveland.  Swift  has  a house  in  Cleveland. 

Mr.  Kincheloe.  They  not  only  fix  the  per  cent,  but  they  give  the 
towns  in  the  report.  I have  it  right  here  before  me. 

Mr.  Taliaferro.  I know  the  report,  Congressman. 

Mr.  Voigt.  If  you  will  pardon  me  for  a minute.  On  page  106  of 
part  1 of  the  Federal  Trade  Commission’s  Report  you  will  find  a 
table  which  is  headed:  “Interstate  slaughterers.  Big  Five.  Pro- 
portion of  number  of  head  slaughtered  by  kinds,  1916.”  Now,  that 
table  shows  that  of  the  total  cattle  slaughtered  in  interstate  com- 
merce the  Big  Five  had  82.2  per  cent.  Of  calves,  the  Big  Five  has 

76.6  per  cent;  sheep,  86.4  per  cent;  and  hogs,  61.2  per  cent.  And 
it  is  stated  here  that  “This  is  from  the  report  of  201  interstate 
slaughterers  taken  together.”  There  can  not  be  anything  wrong 
about  those  figures. 

Mr.  Taliaferro.  What  towns  were  those?  Didn’t  Mr.  Smith 
answer  that? 

Mr.  Voigt.  That  takes  in  every  town  in  the  United  States.  It 
takes  in  all  animals  that  are  slaughtered  in  interstate  traffic. 

Mr.  Taliaferro.  Well,  you  say  they  took  82  per  cent  of  the 
cattle  ? 

Mr.  Voigt.  Eighty- two  and  two-tenths  per  cent. 

Mr.  Taliaferro.  Well,  what  percentage  of  that  is  the  total 
slaughter  ? 

Mr.  Voigt.  Why,  the  total  slaughter  would  be  100  per  cent,  and 
all  other  packers  in  the  country  would  slaughter  the  difference,  or 

18.7  per  cent. 

Mr.  Taliaferro.  My  understanding  is  that  out  of  the  100,000,000 
of  live  stock  slaughtered  in  the  United  States  that  the  big  packers 
slaughter  about  62  per  cent. 


MEAT  PACK  EE. 


207 


Mr.  Voigt.  Well  now,  this  refers  only  to  the  interstate  slaughter. 
Not  to  the  local  slaughter.  The  fact  that  a farmer  out  West  kills  a 
hog,  that  doesn’t  very  much  affect  the  interstate  trade. 

Mr.  Taliaferro.  Oh,  no.  But  62  per  cent  of  the  100,000,000 
head  of  live  stock  slaughtered  in  the  packing  houses  is  slaughtered 
by  the  big  packers,  I understand.  My  understanding  is  that  the 
big  packers  slaughter  62  per  cent  of  the  live  stock. 

Mr.  Voigt.  Well,  the  figures  I have  given  you — and  I haven’t  any 
reason  to  doubt  them — are  for  the  interstate  slaughter.  Of  course, 
there  is  a great  deal  of  stock  slaughtered  within  the  limits  of  each 
State. 

Mr.  Taliaferro.  Well,  the  stock  that  is  slaughtered  in  Detroit  is 
slaughtered  by  local  killers.  The  big  packers  don’t  cut  any  figure 
there. 

Mr.  McLaughlin  of  Nebraska.  A little  while  ago  you  were  talking 
about  the  subject  of  rebates.  I would  like  to  ask,  if  I may,  whether 
at  the  time  the  rebate  practice  was  in  vogue  you  suggested  to  any 
legislative  body  that  the  rebate  practice  should  be  abolished  by  law  ? 

Mr.  Taliaferro.  I never  had  an  opportunity. 

Mr.  McLaughlin  of  Nebraska.  Do  you  know  of  any  other  packer 
that  suggested  that  ? 

Mr.  Taliaferro.  No;  I do  not. 

Mr.  McLaughlin  of  Nebraska.  Did  it  occur  to  you  before  there 
was  talk  from  outside  sources  of  the  law  to  abolish  rebates,  that  it 
was  a wrong  and  unfair  practice  and  should  be  done  away  with  ? 

Mr.  Taliaferro.  Well,  as  we  looked  at  it  afterwards,  Mr.  Mc- 
Laughlin, it  was;  we  could  easily  see  where  inequalities  and  injustice 
had  been  very  evident. 

Mr.  McLaughlin  of  Nebraska.  Yes;  I understand  that  as  you 
looked  at  it  afterwards. 

Mr.  Taliaferro.  Yes. 

Mr.  McLaughlin  of  Nebraska.  But  what  I am  asking  you  now  is 
if  before  a law,  a corrective  law  was  talked  of,  when  you  were  gen- 
erally indulging  in  the  practice,  did  it  occur  to  you  then  that  it  was 
wrong,  and  that  it  should  be  abolished  ? 

Mr.  Taliaferro.  No. 

Mr.  McLauhglin  of  Nebraska.  It  did  not? 

Mr.  Taliaferro.  No;  it  did  not  occur  to  us  until — oh,  until  after 
the  matter  began  to  be  agitated  and  we  really  found  out  how  little 
we  were  getting  compared  to  the  other  fellows  who  were  getting  so 
much  more. 

Mr.  McLaughlin  of  Nebraska.  Well,  then,  and  in  that  particular 
case  it  is  a fact  that  a constructive  law  was  suggested  and  passed  by 
men  outside  of  that  business;  that  they  discovered  the  evil  and  con- 
ceived the  idea  of  correcting  it  ? 

Mr.  Taliaferro.  Yes,  Mr.  McLaughlin. 

Mr.  McLaughlin  of  Nebraska.  That  is  true,  isn’t  it? 

Mr.  Taliaferro.  Yes;  but  the  packers  were  not  the  only  ones  that 
were  getting  rebates.  Everybody  was  getting  the  rebate. 

Mr.  McLaughlin  of  Nebraska.  Yes,  sir. 

Mr.  Taliaferro.  And  everybody  carried  their  passbook  in  their 
pocket,  and  everybody  was  riding  on  a pass.  I went  in  a Pullman 
car  from  Omaha  to  Denver.  The  Pullman  car  was  crowded,  and 
only  one  man  paid  his  fare. 


208 


MEAT  PACKER. 


Mr.  McLaughlin  of  Nebraska.  Yes;  I understand.  That  does  not 
paint  the  condition  that  we  are  talking  about  at  all.  The  suggestion 
for  the  correction  of  rebates,  as  well  as  for  the  evil  in  connection  with 
the  issuing  of  passes,  was  made  by  men  in  legislative  bodies  that  were 
outside  of  those  particularly  affected  by  the  business  ? And  that 
was  corrected  by  these  men  in  legislative  bodies  that  were  outside 
of  those  particularly  affected  by  the  business? 

Mr.  Taliaferro.  And  I thank  you  for  it. 

Mr.  McLaughlin  of  Nebraska.  Yes,  sir.  Now  this  question:  Can 
not  you  conceive  of  the  possibility  of  a condition  where  men  engaged 
in  the  business  might  not  think  of  or  might  not  see  other  evil  prac- 
tices, not  intended  to  be  evil  by  them,  but  that  work  unfair  condi- 
tions on  the  public,  where  again  men  outside,  who  go  through  a long 
series  of  hearings  of  this  kind  and  get  the  testimony  from  every  angle 
might  also  discover  some  other  evil  practices,  and  propose  and  pass 
a constructive  law  that  you  thought  was  unnecessary  at  the  time, 
but  after  10  years  or  so  you  will  say,  “Well,  that  was  a mighty  fine 
thing.  Those  fellows  knew  more  about  that  than  I did7’  ? 

Mr.  Taliaferro.  Yes,  sir;  I certainly  would  agree  with  you, 
Congressman  McLaughlin,  and  would  agree  that  such  a thing  as  that 
is  possible.  There  is  nothing  impossible  that  I know. 

Mr.  McLaughlin  of  Nebraska.  Well,  then,  if  such  a thing  as  that 
is  possible,  then  there  is  the  further  possibility  that  your  suggestion 
a while  ago  with  reference  to  all  of  these  bills,  to  strike  out  everything 
after  the  enacting  clause,  would  completely  defeat  all  constructive 
legislation  that  men  might  have  in  mind  ? 

Mr.  Taliaferro.  If  these  were  constructive  legislation  I should 
say  that  I was  wrong,  but  I consider  them  not  constructive  legisla- 
tion, but  that  they  would  be  disastrously  destructive. 

Mr.  McLaughlin  of  Nebraska.  Well,  of  course,  that  is  a matter 
of  personal  opinion. 

Mr.  Taliaferro.  Well,  my  opinion  is  worth  something,  now,  if 
I do  say  it  myself.  I have  been  in  this  business  longer  than  you 
gentlemen  have  been  on  earth,  and  I know  something  about  it. 

Mr.  Voigt.  Have  you  read  the  report  of  the  Federal  Trade  Com- 
mission on  packers,  Mr.  Taliaferro  ? 

Mr.  Taliaferro.  I have  read  some  of  it,  Mr.  Voigt,  not  all  of  it; 
but  I have  read  enough  of  it  to  be  fairly  well  posted  on  some  of  the 
items  that  they  mention. 

Mr.  Voigt.  Well,  now,  in  that  report  they  are  accused  of  being 
in  combination. 

Mr.  Taliaferro.  In  combination  ? 

Mr.  Voigt.  Yes. 

Mr.  Taliaferro.  Well,  that  is  an  accusation  that  has  not  been 
proven.  Now,  you  can  accuse  anybody  of  anything,  but  you  have 
got  to  prove  it. 

Mr.  Voigt.  Well,  in  your  judgment,  did  you  see  anything  in  that 
report  that  would  lead  you  to  think  that  they  were  not  in  combina- 
tion ? 

Mr.  Taliaferro.  There  are  things  in  that  report  that  would 
naturally  make  a man  feel  that  there  was  something  in  their  report. 
Not  knowing  all  of  the  surrounding  occurrences  or  all  of  the  testi- 
mony, but  just  taking  ex  parte  extracts  from  it,  I can  not  see  that  I 
would  be  convinced  that  there  was  any  actual  basis  for  their  making 
that  assertion. 


MEAT  PACKER. 


209 


Mr.  Voegt.  Do  you  think  that  they  have  been  in  combination  ? 

Mr.  Taliaferro.  I think  they  have  never  been  in  what  is  known 
as  a combination.  But  I think  they  had  an  understanding.  But  that 
is  some  time  ago.  I haven’t  noticed  anything  for  8 or  10  years  that 
I would  consider  from  my  point  of  view,  and  I have  watched  that 
pretty  closely,  too,  but  I haven’t  seen  anything  that  would  indicate 
to  me  that  they  were  in  a combination.  There  was  a time  that  I did 
think  so,  but  I thought  so  from  the  actions  that  came  up  in  the 
business  in  competition  with  them  and  in  connection  with  them,  but 
I haven’t  noticed  it  for  8 or  10  years. 

Mr.  Voigt.  This  fifty-fifty  letter  does  not  arouse  any  suspicion  in 
your  mind  about  combination  ? 

Mr.  Taliaferro.  No;  it  would  merely  be  a business  proposition, 
as  far  as  I could  see.  I know  that  if  I was  perfectly  independent  I 
would  do  the  same  thing.  I know  that  I won’t  let  another  packer 
in  Detroit  get  any  more  live  stock  than  I do.  I haven’t  done  it  yet. 

Mr.  Voigt.  Now,  how  long  has  your  institution  existed  in  Detroit? 

Mr.  Taliaferro.  Since  1869. 

Mr.  Voigt.  Started  up  in  a small  way? 

Mr.  Taliaferro.  Yes;  it  started  up  in  a small  way. 

Mr.  Voigt.  How  many  competitors  have  you  there  ? 

Mr.  Taliaferro.  Well,  we  have  three  large  ones  in  Government 
inspection.  Then  there  are  numerous  smaller  ones. 

Mr.  Voigt.  Now,  let  us  confine  ourselves  to  these  three.  When 
did  the  other  two  competitors  start  in  business  ? 

Mr.  Taliaferro.  Well,  I don’t  know  the  exact  dates,  but  I think 
one  of  them  started  in  1878  or  1879,  and  the  other  one  I think  in  1895 
perhaps.  My  company  is  the  original  G.  H.  Hammond  Co.  That 
is  the  one  that  Mr.  George  H.  Hammond  started  just  as  a butcher 
shop  and  a slaughterhouse. 

Mr.  Voigt.  What  are  the  names  of  the  other  two  places  ? 

Mr.  Taliaferro.  The  Sullivan  Packing  Co.,  and  Parker,  Webb  & 
Co.  And  we  are  the  third. 

Mr.  Voegt.  You  are  the  largest  of  the  three? 

Mr.  Taliaferro.  No;  Parker,  Webb  & Co.  and  ours  are  about  the 
same.  Our  capacity  is  about  the  same.  They  are  a little  larger 
than  we  are.  The  Sullivan  Packing  Co.  is  about  a half  of  either  of 
us  two. 

Mr.  Voigt.  Now  this  Parker-Webb  concern  started  in  business  a 
great  many  years  after  you  did  ? 

Mr.  Taliaferro.  Yes;  they  started  in  business  also  as  a butcher 
shop. 

Mr.  Voigt.  And  they  are  now  about  the  same  size  that  you  are  ? 

Mr.  Taliaferro.  About  the  same,  yes.  I think  they  have  in- 
creased their  capacity  a little. 

Mr.  Voigt.  Well,  now,  there  is  a case  that  is  out  of  line  with  the 
Big  Five.  There  is  a case  where  you  did  not  grow  up  on  equal  per- 
centages, isn’t  there  ? 

Mr.  Taliaferro.  Well,  I couldn’t  say  that  that  was  so  exactly, 
because  they  have  in  that  time  added  a little  more  capital,  and  they 
have  done  a little  bit  more  business,  they  have  increased  their  busi- 
ness faster  than  we  have.  The  town  has  grown  faster,  and  they  were 
a little  bit  more  ambitious  than  we  were,  but  we  kept  our  own  about 
in  proportion,  as  far  as  we  could. 

46985—21 14 


210 


MEAT  PACKER. 


Mr.  Voigt.  But  figuring  by  percentages  now,  that  concern  grew 
faster  than  you  did  ? 

Mr.  Taliaferro.  Yes,  a little,  but  not  unusually  so,  or  not  un- 
reasonably so,  because  we  tried  to  do  as  well  as  we  could. 

Mr.  Voigt.  Well,  now,  the  fact  is  that  that  concern  started  in 
years  after  you  did,  and  now  occupies  a position 


Mr.  Taliaferro.  Yes.  They  may  be,  in  five  years  from  now,  a 
little  bit  ahead  of  us,  but  not  if  we  can  help  it,  they  won’t. 

Mr.  Voigt.  Well,  we  understand  that.  But,  now,  according  to 
your  theory  that  you  have  advanced  in  regard  to  the  Big  Five  run- 
ning neck  and  neck,  you  and  this  concern  are  going  to  be  just  where 
you  are  now,  10  years  from  now.  Do  you  believe  that  is  so  ? 

Mr.  Taliaferro.  I would  hate  to  think  so. 

Mr.  Voigt.  How? 

Mr.  Taliaferro.  I say,  I would  hate  to  think  so. 

Mr.  Voigt.  But  the  Big  Five,  now,  have  been  running  a neck-and- 
neck  race  for  all  these  years,  and  you  think  that  is  all  right. 

Mr.  Taliaferro.  Well,  they  have  not  been  running  a neck-and- 
neck  race.  Swift  has  outstripped  Armour  quite  a little. 

Mr.  Voigt.  Well,  not  according  to  the  figures. 

Mr.  Taliaferro.  Well,  they  do  more  business. 

Mr.  Voigt.  Well,  the  evidence  here  shows  that  they  maintain 
about  the  same  percentage  among  themselves.  Now  if  we  apply 
that  rule  to  your  own  situation,  then  you  and  this  rival  concern  are 
going  to  remain  about  just  where  you  are? 

Mr.  Taliaferro.  Well,  they  won’t  get  any  bigger  than  we  are  if 
we  can  help  it. 

Mr.  Voigt.  Well,  I understand  that  they  won’t  get  any  bigger  it 
you  can  help  it. 

Mr.  Taliaferro.  No. 

Mr.  Voigt.  But,  according  to  some  hidden  law  of  economics,  you 
are  going  to  run  neck  and  neck  now  with  this  other  rival  firm  in 
Detroit,  according  to  this  theory  that  you  have  advanced  concerning 
the  Big  Five. 

Mr.  Taliaferro.  Well,  if  they  put  up  a chill  room,  we  will  put  up 
a chill  room;  if  they  buy  more  hogs,  we  will  buy  more  hogs;  we  will 
try  and  keep  them  where  they  belong.  We  will  certainly  not  let 
them  get  our  trade. 

Mr.  Voigt.  Then  your  explanation  about  that,  applied  to  the  Big 
Five,  is  that  if  they  tried  to  do  that  thing  that  you  are  talking  about 
each  one  has  succeeded  so  admirably  they  have  not  varied  1 per  cent 
for  a great  number  of  years  ? 

Mr.  Taliaferro.  But  1 per  cent  in  an  enormous  business  means 
a good  deal  of  difference.  But  I should  imagine  that  they  have 
varied  more  than  1 per  cent. 

Mr.  Voigt.  I can  not  find  that  they  did. 

Mr.  Taliaferro.  Well,  if  they  did,  why,  they  kept  a pretty  even 
race,  that  is  all  I can  say. 

Mr.  McLaughlin  of  Nebraska.  Are  you  through,  Mr.  Voigt? 

Mr.  Voigt.  Yes. 

Mr.  McLaughlin  of  Nebraska.  I just  want  to  follow  one  question 
that  Mr.  Voigt  asked  a little  while  ago  and  that  you  answered.  I 
believe  that  you  said  that  you  did  believe  some  years  ago,  from  some 


MEAT  PACKER. 


211 


things  that  were  brought  to  your  attention,  that  there  were  evidences 
of  combination  among  some  of  the  packers  ? 

Mr.  Taliaferro.  I thought  so. 

Mr.  McLaughlin  of  Nebraska.  You  thought  so  ? 

Mr.  Taliaferro.  I had  nothing  to  prove  it,  but  I thought  so. 

Mr.  McLaughlin  of  Nebraska.  But  you  thought  so? 

Mr.  Taliaferro.  Yes. 

Mr.  McLaughlin  of  Nebraska.  Some  years  ago? 

Mr.  Taliaferro.  Yes. 

Mr.  McLaughlin  of  Nebraska.  And  you  think  that  has  now  been 
done  away  with  ? 

Mr.  Taliaferro.  I haven’t  noticed  it  for  8 or  10  years. 

Mr.  McLaughlin  of  Nebraska.  You  didn’t  like  that  at  that  time, 
did  you,  Mr.  Taliaferro? 

Mr.  Taliaferro.  No,  I did  not. 

Mr.  McLaughlin  of  Nebraska.  No.  Now,  if  it  should  be  discov- 
ered that  there  is  still  such  a combination,  then  you  think  something 
ought  to  be  done  about  it,  don’t  you? 

Mr.  Taliaferro.  Oh,  yes,  I should  think  so. 

Mr.  McLaughlin  of  Nebraska.  All  right. 

Mr.  Taliaferro.  But  there  are  no  evidences  that  I can  find.  If 
there  is  any  evidence  of  combination,  or  any  depressed  prices,  why 
they  would  be  buying  stuff  at  a profit  instead  of  at  a loss.  They  are 
bu}Ting  stuff  at  a loss  all  the  time.  They  have  lost  money  for  three 
years,  and  the  way  it  is  going  now  we  will  lose  for  a year  or  two  more 
unless  things  suddenly  change  very  materially,  and  what  has  done 
that  has  been  competition.  Everybody  is  grabbing  for  everything 
in  sight,  and  as  long  as  that  is  so  you  are  just  forced  to  pay  so  much 
for  your  product  that  you  can  not  sell  it  and  make  a profit. 

Mr.  McLaughlin  of  Nebraska.  I think  we  will  pass  a good  con- 
structive law  here  that  will  help  allay  conditions. 

Mr.  Taliaferro.  I think  if  you  will  enact  a law  that  will  help  the 
packers  to  make  some  money,  that  is,  in  my  opinion,  the  best  thing 
you  can  do.  That  is  what  I need  more  than  anything. 

The  Chairman.  Isn’t  it  true  that  pretty  nearly  everybody  is 
losing  money  at  this  time,  I mean  in  business  ? 

Mr.  Taliaferro.  Well,  the  packers  have  liquidated  so  very  dras- 
tically, much  beyond  anybody’s  idea.  The  business  has  been  very 
disastrous  and  it  is  an  exceedingly  critical  state  just  now. 

The  Chairman.  Well,  you  are  an  independent  packer,  aren’t  you, 
Mr.  Taliaferro? 

Mr.  Taliaferro.  Yes. 

The  Chairman.  Now  what  is  there  to  the  contention  that  the  big 
packers  are  crowding  out  the  little  fellows,  the  independent  packers  ? 

Mr.  Taliaferro.  There  is  nothing  that  I can  see  in  that. 

The  Chairman.  You  have  no  grievance? 

Mr.  Taliaferro.  I buy  on  the  same  market  that  they  do,  and  I 
sell  on  the  same  market  that  they  do,  and  they  are  not  making  any 
money  when  I am  not  making  any,  and  they  are  making  money 
when  I do.  When  they  make  money  I make  money,  and  when  they 
lose  money  I do. 

The  Chairman.  Do  you  buy  on  the  market  in  Chicago,  the  stock 
yards  ? 


212 


MEAT  PACKER. 


Mr.  Taliaferro.  I buy  on  all  markets.  There  isn’t  any  market 
except  Oklahoma  that  I don’t  buy  in  at  some  time.  I buy  as  far 
west  as  Fort  Worth. 

The  Chairman.  As  far  as  you  know  there  is  no  combination 
against  you  in  the  markets  ? 

Mr.  Taliaferro.  Absolutely  none.  They  couldn’t  do  it. 

The  Chairman.  It  is  free  and  open  competition  all  along  the  line  ? 

Mr.  Taliaferro.  Absolutely.  There  isn’t  the  competition  in  any 
business  in  the  country  that  there  is  in  the  packing  business  to-day. 

The  Chairman.  Now  how  about  the  selling? 

Mr.  Taliaferro.  There  is  just  as  much  competition  in  the  selling 
as  there  is  in  the  buying. 

The  Chairman.  Well,  have  you  any  evidence  of  the  big  packers 
crowding  into  your  district  and  crowding  you  out,  putting  up  a shop 
next  door  to  you,  or  something  of  that  kind  ? 

Mr.  Taliaferro.  I have  evidences  of  their  crowding  into  my 
business  and  into  every  other  business.  They  go  into  business 
wherever  they  can  get  it. 

The  Chairman.  Do  you  crowd  into  theirs?  Do  you  invade  their 
territory  ? _ — 

Mr.  Taliaferro.  Every  chance  I get. 

The  Chairman.  Well,  you  have  no  knowledge  of  any  unfair 
methods  then  ? 

Mr.  Taliaferro.  I have  no  brief  for  the  big  packers. 

The  Chairman.  I am  speaking  of  yourself  now. 

Mr.  Taliaferro.  Yes. 

The  Chairman.  You  have  no  evidence  of  any  evil  practices, 
have  you,  Mr.  Taliaferro  ? 

Mr.  Taliaferro.  Absolutely  none. 

The  Chairman.  Are  there  any  other  questions  ? 

Mr.  Voigt.  I want  to  ask  you  one  more  question,  Mr.  Taliaferro. 
You  said  a while  ago  in  answer  to  a question  as  to  what  would 
happen  in  case  Cudahy,  buying  now  10  per  cent  as  compared  to  the 
other  packers,  should  get  an  ambition  to  jump  up  to  30  per  cent,  it 
would  result  in  undue  competition,  I believe  ? 

Mr.  Taliaferro.  Oh,  it  would  result  that  if  Cudahy  went  into 
any  market — it  doesn’t  make  any  difference  where  it  was — and 
attempted  to  buy  a larger  percentage  of  any  stock  against  any  of 
the  other  packers,  it  would  inevitably  result  in  a fictitious  or  highei 
market. 

The  Chairman.  That  would  result  in  actual  competition  ? 

Mr.  Taliaferro.  Oh,  it  is  actual  competition  now.  That  would 
be  superlative  competition;  it  would  be  foolish  competition. 

Mr.  Creigh.  What  would  happen  to  Cudahy,  Mr.  Taliaferro  ? 

Mr.  Taliaferro.  To  Cudahy? 

Mr.  Creigh.  Yes. 

Mr.  Taliaferro.  He  would  go  broke. 

Mr.  Voigt.  Now  let  us  follow  that  up  a little  further.  Then  it  is 
inevitable,  according  to  your  way  of  thinking,  that  Cudahy  must  in 
the  future  retain  his  10  per  cent  position? 

Mr.  Taliaferro.  Well,  I would  think  that  Cudahy  would  try  and 
get  12  per  cent.  I would  think  he  would  try  to  get  all  he  coulcl. 

Mr.  Voigt.  Well,  now,  suppose  Cudahy  would  try  to  get  12  per 
cent  ? 


MEAT  PACKER. 


213 


Mr.  Taliaferro.  I think  he  could  do  it. 

Mr.  Voigt.  You  think  he  could  do  it? 

Mr.  Taliaferro*  No  question  about  it,  if  he  wanted  to  pay  the 
price.  But  if  he  would  sell  the  stuff  he  would  be  losing  so  much 
money  that  he  would  not  be  able  to  buy  12  per  cent  of  it  long. 

Mr.'  Voigt.  Then  there  is  no  way,  according  to  your  way  of  think- 
ing, for  that  concern  to  get  out  of  the  10  per  cent  class  ? 

Mr.  Taliaferro.  There  is  no  way  for  them  to  get  out  of  the  10 
per  cent  class  that  I know  of,  except  that  they  buy  a larger  percentage 
of  the  product,  the  live  stock. 

Mr.  Voigt.  But  you  say  if  they  attempt  that  they  are  going  to  go 
broke  ? 

Mr.  Taliaferro.  If  they  attempt  it  far  enough  and  go  far  enough, 
I say  they  will. 

Mr.  Voigt.  Assume  now,  they  want  to  get  12  per  cent,  do  you 
think  that  will  break  them  ? 

Mr.  Taliaferro.  Well,  if  they  want  to  market  any  percentage  of 
that  in  Detroit  we  will  put  them  out  of  business  there  pretty  quick. 
We  will  try  to,  anyway. 

Mr.  Voigt.  Then  it  is  your  opinion  that  if  they  do  attempt  to  get 
more  than  the  10  per  cent  they  will  go  broke  ? 

Mr.  Taliaferro.  Any  man  that  tries  to  buy  more  than  he  should 
buy,  or  more  than  he  has  facilities  for  taking  care  of,  is  going  to  go 
broke,  I don’t  care  who  he  is. 

Mr.  Voigt.  Well,  do  you  mean  to  say  that  if  one  of  the  large 
packers  should  increase  1 or  2 per  cent  in  a year,  that  that  would  be 
more  than  he  could  handle  ? 

Mr.  Taliaferro.  Oh,  no,  no;  I don’t  say  that,  Mr.  Voigt. 

Mr.  Creigh.  Would  you  mind  my  putting  in  a sentence  right  there, 
Mr.  Voigt? 

Mr.  Voigt.  Yes;  go  ahead. 

Mr.  Creigh.  You  have  talked  about  Cudahy,  saying  that  they 
have  about  10  per  cent.  Now,  suppose  Cudahy  got  to  11  per  cent, 
we  will  say,  that  is  only  1 per  cent  higher,  and  yet  you  can  see  that 
that  is  10  per  cent  increase  in  our  entire  business.  Now,  nobody 
could  finance  a 10  per  cent  increase  in  a year  or  anything  like  that 
in  the  Cudahy  packing  business.  On  the  other  hand,  if  we  should 
drop  to  9 per  cent,  why  we  would  have  lost  10  per  cent  of  our  entire 
business,  and  again  that  is  almost  unbelievable.  Now,  it  doesn’t 
get  into  the  Federal  Trade  Commission  report  there.  And  far  from 
there  being  any  fixed  percentages  in  these  things,  you  will  find  vari- 
ances that  will  run  all  the  way  from  9 to  12 % in  our  case,  either  way, 
all  the  way  through.  That  means  millions  of  dollars. 

I will  be  glad  to  explain  it  on  Friday  when  I get  into  the  thing, 
but  I thought  perhaps  I might  now  at  this  time  suggest  that. 

Mr.  Voigt.  All  right.  In  connection  with  the  gentleman’s  state- 
ment I want  to  call  attention  to  the  table  found  on  page  50  of  part  2 
of  the  Federal  Trade  Commission  report.  That  shows  for  the  year 
1916  the  weekly  purchases  of  cattle  by  the  Big  Five.  Take,  for 
instance,  Swift  & Co.  On  January  the  8th,  1916,  they  purchased 
34.73  per  cent  of  all  the  cattle  purchased  by  the  Big  Five,  and  during 
the  whole  year  1916  their  purchases  do  not  vary  much  over  one-half 
of  1 per  cent  in  any  week.  The  same  holds  good  of  the  other  packers. 


214 


MEAT  PACKER. 


Mr.  Creigh.  How  about  Cudahy,  Mr.  Voigt?  What  is  our  high 
and  our  low  per  cent  ? 

Mr.  Voigt.  Well,  you  start  in  with  8.99,  which  is  virtually  9 per 
cent,  and  you  wind  up  with  9.57,  but  you  fluctuate  between  8 and 
a fraction  and  9 and  a fraction. 

Mr.  Creigh.  Well,  that  is  in  the  year  1916? 

Mr.  Voigt.  Yes. 

Mr.  Creigh.  If  you  take  their  tables  you  will  find  that  it  is  going 
from  8|  to  18.75,  as  I remember  the  figures.  You  will  see  8J  to  12.75 
is  a 50  per  cent  increase  for  us. 

Mr.  Voigt.  Well,  if  you  will  look  at  this  table,  and  that  is  the  only 
table  that  is  available  in  this  report,  I think  it  will  strike  any  man 
that  that  condition  is  impossible  without  any  preconcerted  action. 

Mr.  Taliaferro.  Well,  I will  tell  you  one  thing,  Mr.  Voigt,  and 
that  is  this:  A packer  establishes  branch  houses  for  the  amount  of 
product  that  he  handles.  If  he  has  branch  houses  that  call  for  a 
certain  number  of  cattle,  the  trade  as  a general  proposition  does  not 
vary  very  much.  He  figures  so  many  cattle  for  this  house  and  so 
many  for  that  house  and  so  many  for  the  other,  and  that  is  just 
about  so  many  cattle.  Now,  he  will  continue  to  buy  the  number  of 
cattle  on  the  total  that  will  supply  the  number  of  branch  houses 
that  he  has.  Well,  now,  that  restricts  his  buying,  because  he  can 
not  handle  any  more  than  the  branch  houses  can  handle,  and  the 
variation  that  comes  is  in  the  demand  at  the  end  of  the  journey. 
Some  weeks  it  takes  a little  more.  Other  weeks  a little  less.  But 
that  buying  is  governed  by  the  amount  that  they  can  supply  to  the 
different  branches  that  they  have  established,  and  that  is  what  keeps 
them  steady  all  the  time,  keeps  all  the  other  packers  steady,  keeps 
them  steady  and  keeps  us  steady. 

Mr.  Voigt.  There  isn’t  any  doubt  that  that  is  true,  Mr.  Taliaferro. 
There  is  no  doubt  but  that  it  is  true  that  a man  who  has  a capacity 
for  30  per  cent  of  a given  product,  of  course,  can  not  jump  to-morrow 
to  30  per  cent.  But  the  thing  that  strikes  me  as  being  suspicious  is 
that  these  men  are  in  this  business,  and  for  years  and  years  they 
occupy  the  same  relative  position.  I challenge  you  or  any  other  man 
to  find  five  men  in  any  competitive  line  of  business  in  the  United 
States  that  will  show  a similar  result. 

Mr.  Taliaferro.  There  is  no  other  business  in  the  United  States 
that  is  operated  like  the  packing  business. 

Mr.  Voigt.  Well,  you  can  say  that  of  the  other  businesses.  You 
can  say  that  their  business  is  not  like  the  packing  business. 

Mr.  Taliaferro.  No,  Mr.  Voigt;  the  Cudahy  racking  Co.,  speak- 
ing along  the  line  of  the  point  that  you  brought  out,  I know  that  they 
are  looking  around  for  locations  for  branch  houses  all  the  time,  and 
I know  that  as  soon  as  they  find  a town  that  will  support  a branch 
house  the  Cudahy  Packing  Co.  gets  in,  unless  somebody  else  beats 
them  to  it.  Now,  I know  that. 

Mr.  Voigt.  Now,  when  you  examine  the  financial  condition  of 
these  five  for,  say,  10  years  past,  you  will  find  that  one  packer  has 
made  practically  twice  as  much  money  as  the  other.  That  indicates 
that  that  concern  is  more  scientific  in  its  business,  more  successful 
in  its  business,  and  notwithstanding  the  fact  that  they  have  shown 
that  additional  efficiency  from  a financial  standpoint,  their  business 
has  remained  stationary  as  compared  with  the  other  four.  I can 
not  conceive  that  that  is  possible. 


MEAT  PACKER. 


215 


Mr.  Taliaferro.  Looking  at  that  business  from  the  outside,  it 
would  seem  so;  yes.  But  when  you  take  the  business  and  analyze 
it  you  will  find  that  a house  in  one  town  will  sell  a product  very  much 
better  and  make  a profit  on  it,  where  a house  in  the  next  town  10 
miles  away  will  lose  money.  Now,  the  reason  that  the  one  packing 
house  is  making  money  is  because  he  has  the  most  favorable  loca- 
tion, and  that  makes  a great  difference  in  the  out-turn  of  the  business. 

Mr.  Voigt.  Now,  then,  that  packer  that  you  speak  of  has  shown 
great  efficiency  in  marketing  his  product,  in  doing  his  business,  in 
making  a profit.  But  there  is  one  way  in  which  he  has  not  shown 
any  efficiency,  and  that  is  in  the  growth  of  the  purchases  of  live  stock. 

Mr.  Taliaferro.  But  he  governs  his  live  stock  by  the  out-turn 
that  he  has.  That  governs  a man’s  purchases  at  all  times. 

Mr.  Gernerd.  Pardon  me,  is  there  such  a thing  as  an  understand- 
ing between  the  packers  not  to  locate  in  each  other’s  territory? 

Mr.  Taliaferro.  I don’t  think  so,  but  I do  think  that  they  are 
watching  every  territory  that  they  can  get  into.  And  when  one  finds 
out  that  there  is  a little  hole  that  he  can  put  a house  in,  he  sticks  it 
in.  If  he  does  not  get  in  there  with  a house,  he  gets  in  there  with  a 
car,  I know  that,  all  the  time.  But  they  are  watching  each  other  like 
cats  and  dogs.  Up  there  in  Detroit  there  is  a location  that  one  of 
the  packers  grab1  1 Jl  1 J ‘ 1 there,  because  he 


thought  it  was 


because  it  took 


away  considerable  of  our  trade.  But  they  are  watching  that  thing 
mighty  close. 

Mr.  Gernerd.  One  point  there  in  regard  to  Mr.  Voigt’s  question 
about  the  one  concern  making  so  much  more  money,  and  you  then 
answered  by  saying  that  it  was  by  reason  of  having  locations  ? 

Mr.  Taliaferro.  Locations. 

Mr.  Gernerd.  Favorable  locations  ? 

Mr.  Taliaferro.  Yes.  One  may  have  a favorable  trade  on  the 
other  side,  with  England,  for  instance,  or  with  Germany,  for  instance, 
or  some  other  place,  or  he  may  have  favorable  car  routes  that  he 
covers,  favorable  territory,  and  in  some  parts  of  the  country  they  are 
short  of  live  stock.  Then  the  packer  that  has  branches  in  that  place 
that  is  short  of  live  stock  gets  a bigger  per  cent  of  the  trade,  and  he 
gets  a better  price. 

Mr.  Gernerd.  I know  in  my  town  that  we  have  got  everybody,  I 
think,  represented. 

Mr.  Taliaferro.  Yes;  and  I think  in  every  other  town  you  will 
have  everybody  represented  if  there  is  a place  to  stick  a house  in. 

Mr.  Gernerd.  And  we  have  a local  packer  there. 

Mr.  Taliaferro.  Yes;  I know  they  keep  us  in  hot  water  all  the 
time.  The  same  as  we  do  them.  We  keep  them  in  hot  water  and 
they  keep  us  in  hot  water. 

Mr.  Gernerd.  They  have  been  making  real  money? 

Mr.  Taliaferro.  They  have  been  making  less  real  money  during 
these  last  three  years. 

Mr.  Gernerd.  Well,  they  can  afford  it. 

Mr.  Taliaferro.  They  can  not  afford  it  another  year. 

Mr.  Gernerd.  Well,  that  may  be. 

The  Chairman.  Are  you  through,  Mr.  Gernerd? 

Mr.  Gernerd.  I am  through. 


216 


MEAT  PACKER. 


The  Chairman.  Have  you  anything  further  you  wish  to  say, 
Mr.  Taliaferro  ? 

Mr.  Taliaferro.  That  is  all,  thank  you. 

The  Chairman.  If  there  are  no  further  questions,  that  will  be  all, 
thank  }mu. 

Now  have  you  any  more  ? 

Mr.  Lightfoot.  I don’t  know  how  long  you  want  to  sit,  Mr. 
Chairman. 

The  Chairman.  We  are  here  to  accommodate  you.  We  were 
called  away  this  afternoon,  so  we  will  stay  a little  longer  to  accommo- 
date you. 

Mr.  Lightfoot.  We  lost  a little  time  on  account  of  the  roll  call, 
and  the  hearing  being  limited,  and  there  being  some  gentlemen  here 
that  must  leave  to-night,  I would  like  if  you  would  let  them  go  on. 
Their  testimony,  I think,  will  be  very  brief.  We  will  call  for  Mr. 
Beacham. 

STATEMENT  OF  ROBERT  J.  BEACHAM,  SECRETARY  MER- 
CHANTS & MANUFACTURERS’  ASSOCIATION,  BALTIMORE, 

MB. 

The  Chairman.  Proceed,  Mr.  Beacham. 

Mr.  Beacham.  My  name  is  Robert  J.  Beacham.  I am  secretary  of 
the  Merchants  & Manufacturers’  Association  of  Baltimore,  an  organ- 
ization composed  of  over  2,500  of  the  leading  business  and  profes- 
sional men  of  our  State.  Its  policy  is  dictated  by  a board  of  directors 
composed  of  55  men  representing  every  activity  in  the  city  of  Balti- 
more that  is  worth  while. 

I am  here  by  their  direction  to  say  to  you  that  this  organization  is 
absolutely  opposed  to  any  legislation  that  affects  only  one  industry. 
Legislation,  to  be  fair  and  equitable,  should  affect  any  or  all  indus- 
tries. 

I have  heard  it  said  here  that  there  are  not  a sufficient  number  of 
laws  on  the  statute  books  to-day  to  take  care  of  ourselves,  and  that 
there  is  need  and  necessity  for  more  legislation  because  of  certain 
conditions  arising.  One  of  the  Ten  Commandments  says,  “Thou 
shalt  not  kill,”  and  we  have  plenty  of  laws  covering  murder,  and  yet 
we  have  murders  committed  every  day.  We  have  in  Baltimore — and 
I don’t  know  how  you  have  it  in  your  States — a most  efficient  United 
States  district  attorney.  We  have  a most  efficient  judge,  and  a most 
efficient  court,  and  I want  to  assure  you  that  if  any  one  violates  a law 
within  our  jurisdiction  he  will  very  likely  be  punished,  for  we  have  to 
our  credit  99  per  cent  of  convictions. 

Now,  it  does  seem  to  the  average  business  man  that  we  have  got 
too  much  law  to-day,  and  what  we  want  is  more  common  sense. 
There  is  too  much  calamity  howling  in  the  world  to-day.  There 
isn’t  enough  of  confidence.  And  I say  to  you  that  in  the  business 
world — and  I know  whereof  I speak — the  conditions  are  most 
deplorable.  And  please  leave  us  alone,  please  leave  us  alone  at  this 
time.  Give  us  a chance  for  our  white  alley.  Give  us  a chance  to 
readjust  ourselves.  We  need  readjusting.  The  business  men  of  this 
country  are  the  ones  who  carry  the  burdens,  and  if  the  business  man 
is  not  successful  the  country  is  not  successful.  Now,  please  leave  us 
alone,  that  is  all  we  ask. 


MEAT  PACKER. 


217 


I don’t  know  anything  about  the  details  of  this  legislation,  but  I 
know  that  we  have  got  too  many  commissions  now.  And  if  we  would 
abolish  a few  of  them,  including  the  Federal  Trade  Commission,  and 
get  around  the  table  and  put  our  heads  together,  like  we  are  doing 
here  to-day,  we  will  get  somewhere.  But  we  won’t  get  anywhere  with 
commissions. 

Mr.  Gernerd.  All  right,  what  you  say  is  all  very  well,  but  sup- 
posing now  it  develops  that  the  five  leading  packers  of  this  country 
are  creating  a fictitious  market,  do  you  mean  to  say  that  we  as  legis- 
lators are  going  to  sit  idly  by  and  fold  our  arms  and  let  it  go  at  that  ? 

Mr.  Beacham.  No,  sir;  I mean  to  say  to  you  that  there  are  on  the 
statute  books  of  the  United  States  enough  law  to  make  it  possible  to 
lock  up  everybody  that  is  guilty  of  violations  of  the  law.  There  is 
enough  law  to  take  care  of  everybody  on  any  proposition. 

Mr.  Gernerd.  All  right.  Do  you  mean  to  say  that  you  have  got 
such  an  efficient  attorney  in  your  State  ? 

Mr.  Beacham.  I know  we  have. 

Mr.  Gernerd.  Do  you  mean  to  say  that  the  eighteenth  amendment 
is  being  enforced  in  your  district  ? 

Mr.  Beacham.  I don’t  know  whether  it  is  or  not. 

Mr.  Gernerd.  You  do  not? 

Mr.  Beacham.  No. 

Mr.  Gernerd.  It  is  right  within  the  scope  of  your  district  attorney 
and  your  courts  and  everything  else. 

Mr.  Beacham.  Well,  I want  to  tell  you  that  it  is  being  fairly  well 
and  efficiently  enforced. 

Mr.  Gernerd.  Fairly  well  ? 

Mr.  Beacham.  Pardon  me  just  a minute.  Do  you  mean  to  tell  me 
that  we  don’t  have  to  continue  the  criminal  courts  of  this  country  in 
anticipation  of  trouble? 

Mr.  Gernerd.  Yes;  we  have  to  have  them. 

Mr.  Beacham.  All  right,  we  have  the  law  there.  I hope  that  you 
won’t  put  a great  moral  question  up  alongside  of  a business  proposi- 
tion. I hope  you  won’t  do  that. 

Mr.  Gernerd.  Well,  some  people  don’t  look  at  that  as  just  a 
moral  question.  Many  regard  that  as  a great  economic  question. 

Mr.  Beacham.  Well,  I don’t;  so  there  is  an  honest  difference  of 
opinion,  and  we  are  all  entitled  to  that. 

Mr.  Gernerd.  Oh,  yes. 

Mr.  Beacham.  I say  to  you,  that  the  business  of  this  country — I 
am  talking  about  business,  because  liquor  is  no  longer  a business  in 
this  country,  and  the  sale  or  manufacture  of  it  is  a violation  of  the  law; 
it  is  no  longer  a business  in  this  country,  and  it  is  up  to  the  Attorney 
General  to  get  rid  of  it,  and  if  I was  the  Attorney  General  I would 
take  a great  chance  to  try  to  do  it. 

The  Chairman.  I understand  you  to  say  that  there  is  no  need  of 
legislation ; that  we  have  adequate  laws  ? 

Mr.  Beacham.  I feel  that  way. 

The  Chairman.  Let  me  quote  the  Attorney  General. 

Mr.  Beacham.  I think  we  have  too  much  law — excuse  me.  Not 
only  adequate,  but  we  have  too  much  law. 

The  Chairman.  Well,  let  me  quote  the  Attorney  General  to  you 
This  question  was  asked  him: 

Do  you  consider  that  the  presen  ‘antitrust  laws  are  adequate  to  meet  the  situation 
outside  of  the  decree? 


218 


MEAT  PACKER. 


Attorney  General  Palmer.  Well,  Mr.  Chairman,  I haven’t  got  as  much  confidence 
in  the  Sherman  antitrust  law  as  I used  to  have.  We  don’t  seem  to  he  able  to  bring 
cases  which  the  Government  believes  are  competent  within  its  terms,  according  to 
the  judgment  of  the  Supreme  Court. 

And  later  on  he  says  in  answer  to  this  question  that  was  asked 
of  him : 

If  it  is  possible  to  convict  others,  isn’t  it  possible  to  make  a law  to  convict  the 
packers? 

Attorney  General  Palmer.  1 didn’t  say  business  men  have  not  gone  to  jail.  I said 
that  under  the  Sherman  antitrust  law  no  business  man  had  been  sent  to  jail. 

Wouldn’t  that  indicate  that  there  might  be  a little  room  for  a 
little  legislation  ? 

Mr.  Beacham.  No,  sir;  that  would  indicate  to  me  that  the  Attorney 
General  was  not  on  the  job.  I know  Mr.  Palmer. 

The  Chairman.  Well,  he  speaks  of  the  Supreme  Court. 

Mr.  Beacham.  I know  Mr.  Palmer.  I have  known  him  for  a good 
many  years.  He  was  Attorney  General  of  the  United  States,  but 
that  indicates  that  he  was  not  on  the  job. 

We  have  had  the  Sherman  antitrust  law  go  before  the  Supreme 
Court  a half  a dozen  times.  In  Jonas  v.  Jonas  we  wanted  to  try  to 
get  some  adjudication,  but  we  haven’t  got  it.  That  is  not  the  fault 
of  the  law;  that  is  because  we  haven’t  had  the  adjudication. 

The  Chairman.  Are  you  in  favor  of  haling  everybody  into  court 
for  the  least  violation  ? 

Mr.  Beacham.  Yes,  sir.  Everybody  that  violates  the  law  should 
go  to  the  captain’s  office,  sir.  That  is  what  the  law  is  for.  That  is 
the  way  I live,  sir. 

Mr.  Gernerd.  Well,  unfortunately  human  nature  is  not  alike, 
Mr.  Beacham. 

Mr.  Beacham.  Well,  that  is  the  way  I am  living.  If  I can  not  pay 
a bill,  I don’t  buy  the  merchandise. 

The  Chairman.  Have  you  anything  further  you  want  to  say  ? 

Mr.  Beacham.  No;  I haven’t  anything  further  to  say,  Mr.  Chair- 
man, except  to  add  that  our  organization — and  I will  put  this  in 
writing  if  you  wish  to  have  me  do  so — representing  the  business  inter- 
ests of  our  city,  feels  that  this  is  no  time  to  pass  any  legislation  of  this 
type  and  character,  and  particularly  when  it  singles  out  a single 
industry.  Now,  if  there  is  need  for  legislation,  if  the  Attorney  Gen- 
eral hasn’t  got  enough  laws  on  the  statute  books,  if  there  are  not 
enough  laws  for  him  to  act  in  the  matter,  then  why  doesn’t  he  prepare 
a bill  and  bring  it  down  here  and  say,  u Here  is  a bill  that  will  cure  this 
evil.  Pass  it.”  I know  that  the  Attorney  General,  Mr.  Daugherty, 
has  got  a couple  of  hundred  of  them  up  there,  and  he  ought  to  be  able 
to  get  everybody,  including  the  devil,  but  if  he  hasn’t  got  enough  law 
to  cover  the  matter,  why,  he  ought  to  come  down  here  with  a bill  and 
say,  “ Gentlemen,  here  is  a bill;  pass  it  and  I will  get  these  chaps.” 
But  what  do  we  do  about  this  ? Why,  the  Committee  on  Agriculture 
has  got  a bill  for  this  interest,  and  somebody  else  has  got  a bill  for 
some  other  interest,  and  somebody  else  has  got  a bill  about  some- 
thing else,  and  so  on,  and  so  on,  and  when  we  put  them  all  together, 
why,  they  don’t  get  you  anywhere. 

Mr.  Gernerd.  We  are  getting  somewhere. 

Mr.  Beacham.  I hope  you  will. 


MEAT  PACKER. 


219 


The  Chairman.  The  bills  introduced  were  designed  to  strengthen 
the  law.  That  is  the  object. 

Mr.  Beacham.  Yes;  I know  it  is  the  easiest  thing  in  the  world  to 
introduce  a bill,  but  there  is  one  bill  introduced  for  one  interest  and 
another  bill  about  another,  and  so  on,  and  they  don’t  get  you  any- 
where. 

The  Chairman.  Have  you  anything  further,  Mr.  Beacham  ? 

Mr.  Beacham.  No,  thank  you;  that  is  all. 

The  Chairman.  If  there  are  no  other  questions  we  will  call  the  next. 

Mr.  Lightfoot.  Mr.  Bischoff. 

STATEMENT  OF  GUSTAVE  BISCHOFF,  PRESIDENT  OF  THE 

ST.  LOUIS  INDEPENDENT  PACKING  CO.,  ST.  LOUIS,  MO. 

The  Chairman.  Kindly  give  your  name. 

Mr.  Bischoff.  Gustave  Bischoff. 

The  Chairman.  And  your  connection  ? 

Mr.  Bischoff.  I am  the  president  of  the  St.  Louis  Independent 
Packing  Co.,  of  St.  Louis. 

The  Chairman.  You  may  proceed,  Mr.  Bischoff. 

Mr.  Bischoff.  I came  here  to-day  to  say  to  you  that  we  don’t  need 
this  additional  legislation.  Or  legislation,  so  to  say,  hampering  us 
in  our  business.  We  now  have  all  of  the  regulation  that  I think  we 
ought  to  have  in  our  line  of  business,  meaning  the  Government  in- 
spection service,  or  the  authorities. 

Now  does  anyone  want  to  put  a question  ? 

The  Chairman.  Do  you  care  to  comment  on  any  of  the  proposed 
bills,  or  state  what  your  objections  are  to  legislation,  or  any  proposed 
legislation  ? 

Mr.  Bischoff.  I think  that  we  now  have  all  the  expense  and  all 
the  hampering  that  we  should  have  in  business. 

The  Chairman.  You  are  opposed  to  any  legislation? 

Mr.  Bischoff.  Yes,  sir. 

Mr.  Gernerd.  You  would  not  say  that  the  inspection  bill  did  not 
serve  a very  good  purpose  ? 

Mr.  Bischoff.  Splendid  purpose. 

Mr.  Gernerd.  You  think  it  serves  a very  good  purpose? 

Mr.  Bischoff.  Yes,  indeed,  splendid. 

The  Chairman.  Have  you  anything  more  to  say,  Mr.  Bischoff  ? 

Mr.  Bischoff.  No,  sir. 

The  Chairman.  I think  that  is  all  then.  We  are  very  much 
obliged  to  you,  sir. 

Have  you  any  others  ? 

Mr.  Lightfoot.  Yes;  we  have;  we  have  Mr.  Krey,  of  St.  Louis. 
We  have  several  gentlemen,  Mr.  Chairman,  who  would  like  to  be 
heard  to-day,  so  that  they  can  get  away,  and  in  view  of  the  recess 
that  was  taken,  if  you  can  give  us  the  time  now,  we  would  be  much 
obliged. 

The  Chairman.  All  right,  we  will  hear  from  Mr.  Krey. 


220 


MEAT  PACKER. 


STATEMENT  OF  FRED  KREY,  PRESIDENT  OF  THE  KREY 
PACKING  CO.,  ST.  LOUIS,  MO. 

The  Chairman.  Give  your  name. 

Mr.  Krey.  Fred  Krey. 

The  Chairman.  And  give  your  connection. 

Mr.  Krey.  I am  president  of  the  Krey  Packing  Co.,  and  also  repre- 
sent the  St.  Louis  local  packers. 

The  Chairman.  You  may  proceed. 

Mr.  Krey.  We  had  a meeting  of  the  local  packers  of  St.  Louis, 
and  I am  here  representing  them.  As  far  as  the  local  packers  are 
concerned,  we  protest  against  any  legislation,  and  I also  say  the  same 
thing  for  the  Krey  Packing  Co. 

The  Chairman.  You  protest  against  any  legislation,  do  you,  Mr. 
Krey  ? 

Mr.  Krey.  Yes,  sir;  we  protest  against  any  legislation.  We  think 
there  is  too  much  legislation  that  puts  too  big  a burden  and  expense 
on  us.  And  the  packing  business,  as  Mr.  Taliaferro  and  some  others 
have  stated  here  in  their  evidence,  has  lost  money  during  the  last  few 
years.  That  is  true  of  all  of  the  packing-house  people.  I know  that 
our  company  has  lost  money  for  the  last  two  years  and  a half  now, 
and  for  the  first  five  months  in  this  year  we  are  way  over  $100,000  in 
the  hole,  and  we  are  in  bad  shape.  And  we  think  that  there  is  too 
much  legislation.  The  packing  business  has  been  losing  money  and 
we  are  in  bad  shape. 

Mr.  Gernerd.  What  is  the  capitalization  of  your  company,  Mr. 
Krey  ? 

Mr.  Krey.  $990,000. 

Mr.  Gernerd.  And  you  do  a business  of  how  much  ? 

Mr.  Krey.  We  kill  all  the  way  from  1,000  to  2,000  hogs  a day. 

Mr.  Gernerd.  When  did  you  begin  in  this  business  ? How  long 
ago  was  your  company  organized,  and  how  long  have  you  been  in  the 
packing  business  ? 

Mr.  Krey.  Started  about  39  years  ago  in  a very  small  way. 

The  Chairman.  How  do  you  account  for  that  loss;  how  was  it 
incurred  ? 

Mr.  Krey.  Sir? 

The  Chairman.  How  do  you  account  for  that  loss  ? 

Mr.  Krey.  Well,  I think  a good  deal  of  it  is  in  the  climbing  of  the 
market,  and  also  the  very  big  proportion  of  running  expenses,  the 
expenses  getting  so  high.  You  might  say  it  refers  to  coal,  labor, 
boxes,  cans,  and  anything  that  you  might  mention,  all  of  which  have 
gotten  so  high  in  price. 

Gentlemen  of  the  committee,  if  you  would  like  for  me  to  do  so,  I 
have  a little  statement  that  shows  just  how  much  money  I have  lost 
and  which  I could  put  into  the  record.  I can  give  it  to  you  showing 
for  the  last  five  months,  or  for  two  years  and  five  months,  or  for  three 
years  and  five  months,  or  including  a number  of  years  past.  I do 
know  that  in  my  39  years’  experience 

The  Chairman  (interposing) . The  losses  that  you  may  have  suf- 
fered will  not  be  the  subject  of  any  legislation.  You  do  not  suggest 
to  this  committee  any  legislation  to  meet  that,  do  you  ? 

Mr.  Krey.  No.  But  if  you  are  going  to  legislate,  we  will  surely 
have  to  make  reports,  and  that  is  a hardship  on  a small  concern,  to 


MEAT  PACKER. 


221 


change  their  books.  I want  to  say  to  you  that  this  is  the  first  time 
I have  been  to  anything  like  this — this  hearing.  I used  to  think  that 
a Congressman  had  a snap,  an  easy  thing,  but  I can  now  see  your  end 
of  it.  You  gentlemen  have  got  the  farmer  on  your  backs,  and  he 
comes  in  and  complains  because  the  price  received  by  him  is  not  high 
enough — for  his  live  stock — and  the  consumer  comes  along  and  com- 
plains that  what  he  buys  is  too  high,  and  you  have  troubles  of  your 
own. 

The  Chairman.  There  has  not  been  very  much  complaint  before 
the  committee. 

Mr.  Krey.  And,  as  I said,  on  the  other  hand,  the  people,  the 
consumers,  complain  that  stuff  is  being  sold  at  too  high  a price. 
You  can  not  satisfy  them  both,  unless  the  packer  has  had  too  much 
profit  here  lately,  and  that  is  not  the  case  at  this  present  time.  I 
do  not  know  what  you  can  do  about  it. 

The  Chairman.  Well,  the  question  is,  is  regulation  necessary? 

Mr.  Krey.  Not  as  far  as  I can  see. 

The  Chairman.  If  so,  what  sort  of  regulation  should  we  have? 

Mr.  Krey.  I do  not  see  any  need  for  regulation. 

Mr.  Gernerd.  In  other  words,  there  is  nothing  wrong  in  the  pack- 
ing business  except  that  the  packers  are  losing  money  ? 

Mr.  Krey.  That  is  all.  I can  see  no  need  for  regulation.  We 
might  need  some  legislation  to  let  us  make  some  money.  But  that 
is  not  any  fault  of  yours  and  you  can  not  do  that.  Conditions  have 
got  to  right  themselves.  The  country  at  large  is  on  too  high  a basis, 
I may  say,  if  conditions  do  not  change.  Transportation  and  other 
things  have  got  to  get  down  on  a lower  basis.  There  are  a good 
many  things  that  it  would  be  cheaper  to  let  rot,  like  the  fruit  in 
California,  than  attempt  to  handle  them.  The  surplus  livers  to-day 
I would  be  glad  to  give  to  the  poor.  I would  give  these  livers  to 
China  or  to  Germany  or  give  them  to  you  gentlemen  if  you  want 
them,  for  nothing.  That  is  true  as  to  my  surplus  livers,  and  there 
are  a lot  of  other  things  in  the  same  position. 

How  are  you  going  to  remedy  the  situation?  Suppose  you  take 
the  matter  of  hair,  and  a few  weeks  ago  I said  to  one  of  my  com- 
petitors : 

Gee,  I struck  it  bad  on  everything. 

And  then  I contracted  for  the  sale  of  my  hair.  Just  two  weeks 
ago  the  gentleman  who  took  my  hair  came  from  Chicago,  a young 
man,  or  a comparatively  young  man,  and  I had  not  sold  him  any 
hair  for  three  years,  and  now  this  year  I had  contracted  for  it.  He 
came  to  me  and  laid  his  cards  on  the  table.  He  owed  Mr.  Bishop’s 
son,  who  testified  before  me,  he  owed  him  some  money  he  said. 
And  what  did  he  say  to  me  ? It  was  this : 

Gentlemen,  I come  down  here  to  let  you  know  that  all  my  contracts  are  canceled 
and  I am  broke. 

He  then  added: 

I owe  you  some  money  and  do  not  want  to  go  into  bankruptcy,  and  I offer  you  my 
plant  in  Chicago. 

Well,  we  could  see  that  the  young  man  did  not  want  to  go  into 
bankruptcy.  Mr.  Bishop,  jr.,  and  myself  offered  the  young  man  the 
hair  for  six  months  for  nothing  with  the  expectation  that  it  would 
give  him  a chance  to  recoup  himself.  This  young  man,  or  com- 


222 


MEAT  PACKER. 


paratively  young  man,  I judged  him  to  be  about  35  years  of  age, 
looked  up  and  seemed  to  be  happy.  A few  minutes  later  he  kinda 
looked  down,  and  we  could  see  that  he  rather  quivered,  and  then  in 
a short  while  he  looked  up  again  and  said: 

Gentlemen,  I surely  thank  you,  but  if  I get  the  hair  for  nothing  the  expense  of 
making  it  up  eats  me  up.  I thank  you. 

And  I did  not  get  anything  for  my  hair.  Now,  those  are  the  con- 
ditions confronting  us  to-day.  We  are  almost  in  the  same  condition 
as  your  man  down  there.  It  is  a horrible  condition. 

The  Chairman.  How  about  hides  ? 

Mr.  Krey.  Mr.  Chairman,  I only  kill  about  50  or  75  cattle  a day, 
something  like  that,  just  for  a local  concern. 

The  Chairman.  How  about  tankage? 

Mr.  Krey.  I myself  let  about  150  men  go  the  first  of  last  month, 
and  I intend  to  run  my  tankage  down  the  river.  That  is,  I will  have 
to  haul  then. 

The  Chairman.  There  is  no  market  for  by-products? 

Mr.  Krey.  That  is  where  the  trouble  comes  in,  Mr.  Chairman, 
and  gentlemen  of  the  committee.  Those  men  who  were  in  the  tankage 
room  were  paid  52  cents  an  hour,  or  they  were  getting  60  cents  an 
hour  and  they  were  reduced  to  52  cents  an  hour  by  Judge  Alschuler’s 
decision,  which  the  Government  fixed  here  at  Washington. 

The  Chairman.  What  is  the  present  price  of  packer  hides  ? 

Mr.  Krey.  I sell  my  hides  green,  and  I get  from  about  6 cents  to  7 
or  8 cents  a pound  for  them. 

The  Chairman.  How  much  did  you  get  for  them  a year  ago? 

Mr.  Krey.  If  I am  not  mistaken  the  price  was  around  45  to  50  cents. 

The  Chairman.  How  about  beef?  How  does  the  wholesale  price 
compare  with  that  of  a year  ago  ? 

Mr.  Krey.  Well,  as  I say,  the  beef  end  I have  nothing  at  all  to  do 
with.  My  son-in-law  handles  that. 

The  Chairman.  How  about  pork  or  hams  ? 

Mr.  Krey.  Hams  are  comparatively  high  and  so  are  pork  loins, 
comparatively  speaking.  My  hogs  last  week  cost  $8.35  a hundred  or 
somewhere  around  that,  and  I never  saw  them  so  high.  But  that  is  as 
somebody  else  said  this  morning  about  lamb  chops  and  selected  cuts 
that  the  people  want.  That  is  the  only  thing  you  can  sell. 

Gentlemen  of  the  committee,  I will  give  you  my  statement  if  you 
wish  it. 

The  Chairman.  No;  I do  not  think  the  committee  would  be 
interested  in  your  personal  affairs.  We  want  to  find  out  something 
about  the  business.  The  contention  is  that  the  price  of  live  stock 
has  been  materially  reduced. 

Mr.  Krey.  It  has. 

The  Chairman.  But  that  the  wholesale  price  of  the  finished  prod- 
uct has  kept  up;  that  there  has  not  been  a decrease  in  price  to  cor- 
respond with  the  decrease  in  price  of  the  live  stock. 

Mr.  Krey.  Mr.  Chairman,  I hear  that  same  thing  all  over  the 
country. 

The  Chairman.  You  have  explained  that  in  part.  Now  what  else 
have  you  to  say  about  that  matter  ? 

Mr.  Krey.  I hear  the  same  song  from  my  friends  wherever  I go. 
I have  been  from  San  Francisco  around  the  central  part  of  the 
country,  and  now  I come  here,  and  it  was  only  a few  months  ago  that  I 


MEAT  PACKER. 


223 


was  on  the  grand  jury,  and  there  were  new  friends  I have  never  met 
before.  When  they  found  out  I was  in  the  packing  business  of  course 
they  right  away  branded  me  as  one  of  the  robbers.  Of  course  they 
do  not  understand  the  situation. 

The  Chairman.  If  the  packers  are  losing  money,  how  about  the 
retail  price  of  meat  products  ? 

Mr.  Krey.  Well,  that  is  what  they  are  complaining  about — the 
consumers. 

The  Chairman.  Can  you  state  how  retail  prices  compare  with  the 
price  of  the  live  animal  ? 

Mr.  Krey.  No;  I can  not. 

The  Chairman.  You  come  in  contact  with  them? 

Mr.  Krey.  I come  in  contact  with  them  and  have  a good  many 
friends  who  are  retail  butchers.  They  have  done  well  here  lately. 
That  is  all  I know  about  the  matter.  I do  not  know  what  they  sell 
the  meat  products  at.  But  the  same  question  was  put  to  me  by 
some  man  when  I sat  in  the  grand  jury,  and  these  men  wanted  to 
know  whose  fault  it  was.  I told  him  it  was  their  own  fault.  They 
wanted  to  know  why.  I said: 

As  long  as  you  go  to  that  butcher  and  pay  him  the  price  he  asks  and  he  does  not 
lose  a single  customer,  he  would  be  a darned  fool  to  come  down  in  price.  But  you 
tell  your  wife  to  go  and  shop  around. 

I told  him  the  trouble  was  that  when  somebody  tries  to  reduce  the 
price  and  advertises  a reduced  price  the  average  consumer  pays  little 
or  no  attention  to  him. 

Now,  take  hides;  and  when  I bought  a pair  of  shoes  a few  weeks 
ago,  black  shoes,  I paid  $5  for  them,  and  I have  them  on  at  this 
time.  What  did  I cfo?  I looked  around.  I want  to  patronize  the 
fellow  who  sells  within  reason.  And  so  it  is  that  I say  it  is  the 
people’s  fault,  these  high  prices.  The  old  gentleman  here  who  rep- 
resented the  farmers  told  you  why  the  expense  went  on.  Of  course 
I do  not  know  the  retail  end  of  it,  and  he  may  have  his  story  all  right. 
But  you  will  have  to  get  that  from  him.  And  the  retailer  may  have 
another  story. 

The  Chairman.  The  expense  to  him  would  be  cost  of  distribution. 
He  has  to  pay  rent,  clerk  hire,  telephone  hire,  and  so  on. 

Mr.  Krey.  It  is  all  on  a high  basis.  If  you  legislate  too  much,  it 
may  do  more  harm  than  good.  If  you  can  legislate  like  you  did  in 
the  matter  of  the  meat  inspection  law,  all  right.  That  was  a good 
law.  Or  if  you  can  legislate  as  I have  heard  about  the  Interstate 
Commerce  Commission  stopping  rebates — that  was  a very  good 
thing. 

But,  gentlemen  of  the  committee,  be  careful.  Otherwise  you  may 
be  just  in  the  same  condition  in  a year  or  two,  and  the  people  will 
be  cursing  you  just  like  some  people  are  cursing  to-day.  Maybe 
some  of  you  Congressmen  have  voted  for  some  bill,  and  you  thought 
it  was  a good  thing;  you  were  satisfied  you  were  doing  a good  thing 
but  may  be  it  did  not  turn  out  all  right.  Sometimes  these  things  do 
not  work  out  so  well.  Legislation  can  not  cure  all  the  evils.  If  you 
pass  some  one  of  these  bills,  it  is  a question  what  the  commission  you 
will  provide  for  will  do.  It  is  surely  going  to  mean  an  additional 
expense;  that  is  a cinch;  and  it  has  got  to  be  paid  from  some  source. 

The  Chairman.  Isn’t  it  true  that  proper  regulation  is  protection 
to  the  honest  vendor  ? 


224 


MEAT  PACKJR. 


Mr.  Krey.  If  there  is  any  protection  in  it,  all  right,  but  I am  afraid 
of  it.  We  would  rather  not  have  it,  because  I think  we  are  going  to 
crawl  out  of  this  situation  in  a reasonable  time,  so  far  as  we  are  con- 
cerned; that  is,  so  far  as  we  packers  are  concerned. 

The  Chairman.  Any  other  questions  ? 

Mr.  Krey.  I thank  you. 

Mr.  Lightfoot.  We  have  just  one  more  witness. 

The  Chairman.  Let  him  come  around. 

STATEMENT  OF  ME.  I.  E.  DENNIG,  TREASURER  OF  THE  ST- 
LOUIS  INDEPENDENT  PACKING  CO.,  ST.  LOUIS,  MO. 

Mr.  Gernerd.  Where  are  you  located  ? 

Mr.  Dennig.  At  St.  Louis.  We  have  a good-sized  plant,  and  our 
sales  last  year  were  about  $34,000,000. 

Mr.  Gernerd.  That  is  a pretty  good,  respectable  business. 

Mr.  Dennig.  We  killed  a little  over  634,000  hogs  and  about  71,000 
cattle,  and  some  sheep  and  some  calves.  I can  give  you  full  details 
if  you  want  them. 

In  a general  way  we  are  here  on  account  of  these  various  bills.  I 
have  read  over  the  McLaughlin  bill,  which  is  similar,  I believe,  to 
the  Norris  bill.  I have  read  over  the  Haugen  bill,  and  have  read  over 
the  Anderson  bill. 

While  I would  possibly  prefer  one  to  another,  yet  in  a general  way 
we  are  opposed  to  any  interference  with  the  packing-house  business. 
We  think  that  we  are  in  the  same  class  with  every  other  line  of  busi- 
ness. We  have  a good  reputation  with  our  bankers  and  with  our 
customers  and  with  our  fellowmen,  and  we  do  not  think  we  should 
be  ostracized  and  put  in  a separate  class  as  against  the  foundryman 
or  the  baker  or  the  shoemaker  or  any  man  in  any  other  line  of  business, 
and  if  you  must  legislate  for  business  why  not  do  it  for  all,  and  not 
select  the  packers,  but  make  every  man  come  up  to  your  requirements 
as  you  see  the  situation? 

1 will  take,  for  instance,  the  Haugen  bill,  putting  us  under  the 
Secretary  of  Agriculture,  with  whom  we  are  familiar;  I mean  the 
present  Secretary.  Even  if  that  bill,  which  I believe  could  be  worked 
under  the  easiest  of  any  of  the  bills,  were  enacted  into  law,  yet  even 
in  the  case  of  that  bill  it  is  not  defined  exactly  what  power  the  Secre- 
tary would  have  over  the  packing  business.  That  matter  ought  to 
be  well  defined  in  any  bill,  whether  for  the  packers  or  for  all  of  the 
business  men  in  this  great  country.  Those  powers  must  be  limited. 
Only  the  public  good  should  govern  and  nothing  else. 

So  it  is  that  I say  in  a general  way  we  would  much  prefer  not  to 
have  any  legislation,  not  unless  you  include  every  line  of  business  in 
the  United  States,  and  put  them  all  in  the  same  class.  They  are  no 
better  than  we  are  and  have  not  been  in  the  past,  and  I really  would 
prefer  no  legislation  of  any  kind.  I do  not  think  it  necessary,  espe- 
cially not  at  this  time. 

Gentlemen  of  the  committee,  you  should  give  the  men  in  business 
a chance  to  get  on  their  feet  again.  They  have  troubles  enough  of 
their  own  without  having  to  make  out  a lot  of  new  reports  and  put 
in  a new  set  of  books  and  having  a new  bunch  of  inspectors  come 
around  the  plant.  Between  income  inspectors  and  the  balance  of 
them  one  has  nothing  to  do  but  to  have  two  or  three  men  on  the  job 


MEAT  PACKER. 


225 


pulling  out  books  for  them,  and  what  is  the  result?  When  it  is  all 
over  they  will  give  you  a clean  bill  of  health,  but  when  it  is  over  you 
have  wasted  from  a week  to  six  or  seven  weeks  with  them.  And 
when  it  is  all  over  they  have  not  improved  the  situation  any  nor 
lessened  the  cost  of  the  article  to  the  consumer.  It  will  do  nothing 
except  probably  to  give  a job  or  two  to  some  inspectors,  and  I do  not 
think  there  is  any  advantage  in  that.  — 

We  wish  you  might  see  your  way  clear  to  head  off  this  proposed 
legislation  and  give  us  a chance  to  get  on  our  feet  again.  But,  in 
any  event,  keep  us  in  line  with  the  balance  of  the  business  men  in 
the  country.  Do  not  make  a mark  of  us. 

The  Chairman.  Any  questions,  gentlemen  of  the  committee? 

Mr.  Voigt.  I have  none.  

The  Chairman.  Have  you  finished  jmur  statement  ? 

Mr.  Dennig.  I have  practically  finished  it.  If  you  want  to  ask 
me  any  business  questions  I have  some  memoranda  here  I can 
refer  to. 

There  is  one  more  thing  I want  to  say.  There  were  some  statements 
made  to-day  from  which  I judge  there  must  be  quite  a difference 
of  opinion  as  to  the  kill  of  animals  in  this  country.  I have  before 
me  some  figures  that  we  got  from  an  association  which  we  belong  to, 
the  Institute  of  American  Meat  Packers.  For  instance,  in  the  year 
1920  the  kill  of  all  animals  slaughtered  in  the  United  States  was 
100,650,502,  of  which  the  smaller  packers  and  big  butchers  killed 
63,500,544,  or  63  per  cent.  Of  those  100,000,000  cattle  slaughtered 
there  were  inspected  by  the  Government  and  other  people  for  shipping 
purposes  61,710,402,  and  of  that  total  the  five  large  packers  killed 
37,155,958,  all  of  which  were  inspected. 

I have  figures  on  this  matter  clean  back  to  1913,  and  the  percentages 
do  not  vary  much.  So  you  will  see  that  the  smaller  packer  and  the 
butcher  kill,  of  all  the  animals  slaughtered — cattle,  hogs,  sheep,  and 
whatever  else  they  may  kill,  calves  and  so  forth — practically  63  per 
cent.  So  you  will  see  we  are  quite  a factor. 

And  so  it  is  I say  when  you  want  to  pick  out  the  five  big  packers 
and  judge  the  balance  of  the  trade  by  them,  you  are  making  the  tail 
wag  the  dog.  I do  not  think  you  mean  to  do  that. 

The  Chairman.  Those  figures  were  prepared  by  whom  ? 

Mr.  Dennig.  The  Institute  of  American  Meat  Packers.  That  is 
an  association  of  all  the  meat  packers  of  the  United  States,  little 
and  big. 

The  Chairman.  Those  figures  are  probably  more  complete  than 
any  we  have. 

Mr.  Veeder.  Those  figures  are  taken  from  the  official  records  of 
the  Department  of  Agriculture. 

The  Chairman.  That  is  the  total  kill  of  animals  ? 

Mr.  Veeder.  Yes,  sir. 

The  Chairman.  Both  intrastate  and  interstate  ? 

Mr.  Veeder.  Yes,  sir;  it  is  the  total  kill  going  into  consumption. 

Mr.  Voigt.  I think  that  statement  ought  to  go  into  the  record. 

The  Chairman.  Without  objection  it  is  so  ordered. 

(The  paper  referred  to  is  here  printed  in  full  in  the  record,  as 
follows :) 

46985—21 15 


226 


MEAT  PACKER. 


Year. 

Total 
animals 
slaughtered 
in  United 
States. 

Total 

animals 

slaughtered 

under 

Federal 

inspection. 

Total 

slaughtered 
by  other 
than  five 
larger 
packers. 

Total 
slaughter 
of  five 
larger 
packers. 

Per  cent 
of  total 
slaugh- 
tered by 
five 
larger 
packers. 

Per  cent 
of 

federally 
inspected 
slaugh- 
tered by 
five  larger 
packers. 

Per  cent 
of  total 
slaugh- 
tered by 
all  others 
than  five 
larger 
packers. 

1913 

93,639,474 
89,673, 588 
96, 803, 636 
106, 892, 639 
90,  832, 131 
107,147,494 
110,251,  730 

57,560,774 
55, 390, 788 
59, 718, 436 
65, 901, 739 

59,920,494 
57, 453, 949 
63, 332, 641 
69, 166, 933 
53, 802, 184 
64, 844, 193 
65,926,925 
63, 500, 544 

33, 718,980 
32, 219, 639 
33,470,995 
37, 725, 706 
37, 029, 947 
42, 303, 301 
44, 324,  805 
37, 155, 95S 

36 

59 

64 

1914 

36 

58 

64 

1915 

35 

56 

65 

1916 

35 

57 

65 

1917 

56,913,131 

41 

65 

59 

1918 

66, 956, 794 

40 

63 

60 

1919 

68,649,330 

40 

65 

60 

1920 

100, 656, 502 

61,710,402 

37 

60 

63 

In  connection  with  these  figures  it  should  be  remembered  that  the  five  larger  packers  are  in  keen  com 
petition  with  each  other.  It  should  also  be  remembered  that  the  largest  of  the  five  handles  no  more  than 
12  per  cent  of  the  country’s  total  meat,  or  about  22  per  cent  of  the  output  of  plants  under  Federal  inspection. 


Mr.  Voigt.  Your  figures  do  not  contradict  the  figures  of  the 
Federal  Trade  Commission,  do  they  ? 

Mr.  Dennig.  I do  not  know,  except  I do  not  believe  you  quoted 
this  morning  the  entire  kill.  You  only  quoted  the  interstate  kill  or 
the  inspected  cattle,  rather. 

Mr.  Voigt.  It  was  understood  that  that  was  the  number  of  cattle 
killed  that  were  in  interstate  commerce.  We  all  know  that  there  are 
more  animals  killed  in  the  country  than  are  killed  in  interstate 
commerce. 

Mr.  Dennig.  Well,  yes.  That  is  the  reason  I got  these  figures.  I 
felt  the  same  way,  and  I do  not  think  that  the  entire  business  should 
be  controlled  by  the  minority.  In  this  country  the  majority  rules, 
and  why  should  we  be  judged  by  what  is  an  absolute  minority  as  to 
whether  we  are  guilty  or  not. 

Mr.  Voigt.  You  understand  that  none  of  these  bills  attempts  to 
regulate  any  packer  who  does  not  do  an  interstate  business  ? 

Mr.  Dennig.  That  is  true. 

Mr.  Voigt.  These  bills  do  not  apply  to  the  local  butcher. 

Mr.  Dennig.  Nevertheless,  if  you  are  going  to  give  us  legislation 
and  you  think  that  legislation  is  absolutely  necessary  do  not  exclude 
anybody;  put  them  all  in,  whether  it  is  the  baker  or  the  butcher  or 
the  dry-goods  man  or  anybody  else.  If  he  violates  the  law  have  him 
yanked  up  and  give  him  his  medicine.  That  is  the  way  we  feel  about 
it,  not  that  we  should  be  picked  out  from  all  the  rest. 

Mr.  Voigt.  It  may  be  too  big  an  order  for  this  committee  or  even 
for  the  Congress  to  try  at  one  time  to  regulate  them  all. 

Mr.  Dennig.  Yes;  but  this  is  something  that  goes  into  every- 
body’s house  and  we  are  all  interested. 

Mr.  Voigt.  Your  only  objection  to  this  legislation  is  that  you 
might  be  called  upon  to  make  some  additional  reports  ? 

Mr.  Dennig.  Yes;  and  we  would  be  bothered  in  many  ways. 
Here  is  another  thing  that  comes  to  me.  I have  read  this  bill  over 
in  a way,  and  suppose  one  of  our  employees  makes  a mistake  of 
some  kind,  what  will  be  the  result  ? It  all  depends  upon  the  inspector, 
and  the  mood  he  happens  to  be  in  at  the  time,  as  a general  thing. 
Whether  I make  a mistake  or  whether  our  president  makes  it  or  one 
of  the  men  out  on  the  loading  dock  makes  a mistake  in  violation  of 
the  rules,  we  can  be  reported  and  maybe  found  guilty. 


MEAT  PACKER. 


227 


Mr.  Voigt.  Oh,  you  need  never  fear  anybody  putting  you  in  jail 
for  making  a mistake. 

Mr.  Dennig.  You  have  never  had  any  experience  in  the  packing- 
house business.  With  all  due  respect  to  the  pure  food  law  it  all 
depends  upon  the  inspector  as  to  whether  or  not  you  are  going  to 
have  pleasant  conditions.  If  he  is  what  is  sometimes  called  a crank 
or  an  objectionable  fellow  he  can  make  his  little  job  cost  you  ten 
times  his  salary  and  not  do  any  good  to  anybody. 

Mr.  Voigt.  All  laws  are  executed  by  human  beings  and  you  might 
offer  that  same  objection  to  any  law. 

Mr.  Dennig.  Yes;  but  leave  us  as  we  have  been  with  the  balance 
of  the  country  and  not  single  us  out. 

Mr.  Gernerd.  And  don’t  have  any  law  for  you  at  all  ? 

Mr.  Dennig.  Well,  do  not  leave  the  other  fellows  out  and  put  us  in. 
Men  are  very  much  the  same  the  world  over,  and  why  single  us  out  ? 

Mr.  Voigt.  If  I were  you,  I would  not  worry  about  this  packer 
legislation  at  all.  I do  not  think  it  will  hurt  you  one  particle. 

Mr.  Dennig.  Well,  I fear  it  would.  If  I had  this  body  of  men 
sitting  around  here  to  administer  it,  I would  not  care  at  all  how  you 
wrote  the  law,  because  I would  try  to  do  what  is  right  and  I would 
feel  that  you  would  agree  with  me. 

Mr.  Voigt.  There  will  not  be  anything  in  any  packer  legislation  that 
is  going  to  hurt  anybody  who  does  business  on  the  square. 

Mr.  Dennig.  We  have  refrigerator  cars  and  all  that  kind  of  business, 
and  we  have  to  run  a modern  plant,  and  we  have  to  have  everything, 
and  it  means  a continual  investigation. 

I can  not  say  with  all  of  them  that  we  lost  money  last  year.  We 
made  a little  money. 


Mr.  Gernerd.  I want  to  congratulate  you.  You  are  the  first 
fellow  I have  met  yet  who  has  made  any  money. 

Mr.  Dennig.  I did  not  want  to  throw  a cold  curtain  over  everything. 
But  I want  to  say  that  within  the  last  month  we  have  lost  over  one- 
half  of  what  we  have  made  during  the  year.  But  I think  we  will  make 
it  up. 


Mr.  Voigt.  Average  it  up  for  five  years  and  it  will  be  all  right  I 
think. 

Mr.  Dennig.  Take  the  year  1819 

Mr.  Voigt  (interposing).  Why  not  take  the  year  1918? 

Mr.  Dennig.  Well,  the  year  1819  was  a fair  year  I understand  from 
some  of  my  ancestors. 

We  were  fortunate  in  selling  our  calfskins  about  August,  1919,  for 
$1.  That  price  held  good  until  about  September  30  and  it  fell  to 
50  cents.  That  is  over  a year  and  a half  ago.  On  September  1,  1920, 
we  inventoried  them  at  25  cents,  and  we  inventoried  them  on  March  1 
at  17  cents,  and  we  sold  them  the  other  day  at  15^  cents.  We  have 
been  holding  the  bag  ever  since. 

Mr.  Voigt.  I had  a letter  frpm  a farmer  in  my  district  about  six 


matter. 

Mr.  Dennig.  He  is  right. 

Mr.  Voigt.  He  is  worse  off  than  you  are. 

Mr.  Dennig.  Take  the  matter  of  steer  hides  and  they  were  up  to 
62  cents.  We  were  bid  the  other  day  10  cents  on  condition  that  we 


228 


MEAT  PACKER. 


would  give  the  man,  let  me  see,  his  first  note  is  to  be  paid  in  five 
months,  and  in  five  different  payments.  And  from  62  cents  the 
price  drops  down  to  10  cents,  and  we  had  to  give  him  seven  months 
to  pay  the  money  in. 

Mr.  Voigt.  Well,  if  you  consider  the  condition  of  the  other  fellow, 
you  have  much  to  congratulate  yourself  on. 

Mr.  Dennig.  Where  does  the  shoemaker  come  in  in  the  matter  of 
the  big  price?  I paid  $12  the  other  day  for  these  shoes,  and  the  top 
price  for  them  was  $14.50.  They  have  only  gone  down  $2.50  and 
leather  has  gone  down  10  times  that  amount. 

Mr.  Gernerd.  Do  you  know  what  the  cost  of  labor  is  in  the  making 
of  a pair  of  shoes  ? 

Mr.  Dennig.  No,  sir;  but  I know  it  is  nothing  like  that. 

Mr.  Gernerd.  Do  you  know  the  actual  cost  of  the  labor  in  the 
making  of  a pair  of  shoes? 

Mr.  Dennig.  No,  sir. 

Mr.  Gernerd.  Well,  that  is  according  to  the  cost  of  labor  in  a pair 
of  shoes,  and  then  there  is  the  cost  of  selling. 

Mr.  Dennig.  It  is  the  idea  of  hating  to  give  up  the  profit  they 
have  been  getting  the  last  four  years. 

Mr.  Gernerd.  You  believe  in  reciprocity  in  business,  don’t  you  ? 

Mr.  Dennig.  Yes,  sir. 

Mr.  Gernerd.  I happen  to  know  just  that  end  of  the  business,  and 
there  are  three  items  which  hold  up  the  cost  of  shoes,  labor,  transpor- 
tation and  the  cost  of  selling,  and  newspaper  advertising  represent  10 
per  cent  of  the  cost  of  the  retail  business. 

Mr.  Dennig.  I think  that  is  so,  and  I think  it  ought  to  be  cut  out. 

Mr.  Gernerd.  That  is  why  you  are  paying  $12  for  a pair  of  shoes. 

Mr.  Dennig.  Still,  when  I think  that  hides  have  gone  down  ten 
times,  the  cost  of  a pair  of  shoes  ought  not  to  be  that  much. 

Mr.  Gernerd.  But  the  man  that  has  a store  down  on  Pennsylvania 
Avenue  pays  the  same  rent  that  he  has  been  paying,  and  the  same 
clerk  hire  and  other  similar  expenses. 

Mr.  Dennig.  Then  there  are  other  things  which  are  much  more 
out  of  line  than  in  the  case  of  our  business. 

The  Chairman.  The  committee  will  now  stand  adjourned  until 
to-morrow  morning  at  9 o’clock. 

(Thereupon,  at  6 o’clock  and  17  minutes  p.  m.,  the  committee 
adjourned  until  tomorrow,  Thursday,  May  5,  1921,  at  9 o’clock.) 


MEAT  PACKER. 


Committee  on  Agriculture, 

House  of  Representatives, 

Thursday,  May  5,  1921. 

The  committee  met  at  9 o’clock  a.  m.,  Hon.  Gilbert  N.  Haugen 
(chairman)  presiding. 

There  were  present:  Mr.  Haugen,  Mr.  McLaughlin  of  Michigan, 
Mr.  Purnell,  Mr.  Voigt,  Mr.  McLaughlin  of  Nebraska,  Mr.  Riddick, 
Mr.  Tincher,  Mr.  Williams,  Mr.  Sinclair,  Mr.  Hays,  Mr.  Thompson, 
Mr.  Gernerd,  Mr.  Clague,  Mr.  Clarke,  Mr.  Aswell,  Mr.  Kincheloe, 
Mr.  Jones,  and  Mr.  Ten  Eyck. 

The  Chairman.  We  are  very  fortunate  in  having  with  us  this 
morning  the  Secretary  of  Agriculture,  and  we  will  be  pleased  to  hear 
from  him. 

STATEMENT  OF  HON.  HENRY  C.  WALLACE,  SECRETARY  OF 

AGRICULTURE. 

Secretary  Wallace.  Mr.  Chairman,  I have  looked  over  these  bills 
which  you  sent  me,  PI.  R.  14,  the  Haugen  bill 

The  Chairman.  Mr.  Secretary,  there  are  a number  of  bills  here, 
and  I do  not  know  whether  you  have  had  time  to  study  them  all  or 
not. 

Secretary  Wallace.  I have  not,  Mr.  Chairman.  When  I went 
into  this  matter,  it  occurred  to  me  that  any  service  I might  be  able 
to  render  in  this  regard  would  be  in  the  way  of  discussing  the  proposi- 
tion in  its  general  phases. 

The  Chairman.  One  of  the  difficulties  we  have  had  in  considering 
this  question  has  been  as  to  just  where  to  place  the  jurisdiction. 
As  one  bill  is  drawn  the  jurisdiction  would  be  given  to  the  Interstate 
Commerce  Commission  as  to  the  stockyards  on  the  theory  that  they 
are  a part  of  the  transportation  facilities  of  the  country,  and  that 
the  packers  themselves  should  be  placed  under  the  control  of  the 
Secretary  of  Agriculture;  another  bill  provides  that  the  packers 
should  be  placed  under  the  Federal  Trade  Commission,  while  still 
another  bill  provides  for  a new  commission  altogether.  The  bill 
which  I have  introduced  places  the  stockyards  under  the  Interstate 
Commerce  Commission  and  the  packers  under  the  Secretary  of 
Agriculture. 

In  view  of  the  activities  of  the  Department  of  Agriculture  in  the 
stockyards  and  in  view  of  its  splendid  accomplishment,  it  has  been 
a difficult  question  for  us  to  determine  whether  they  should  now  be 
divided  or  whether  the  entire  authority  should  not  be  given  to  the 
Secretary  of  Agriculture;  that  is,  giving  the  Secretary  of  Agriculture 
jurisdiction  over  the  stockyards  as  well  as  over  the  packers.  Your 
predecessor,  I believe,  suggested  that  the  Secretary  of  Agriculture 

229 


230 


MEAT  PACKER. 


should  be  given  jurisdiction  over  all  of  them.  That  has  been  given 
consideration  by  the  committee.  We  would  like  particularly  to 
have  your  views  on  that  matter. 

Mr.  Tincher.  And  I would  like  to  have  your  views  on  the  whole 
subject  of  legislation. 

Mr.  Gernerd.  Yes;  as  to  whether  this  legislation  is  needed  and 
what  things  are  to  be  corrected  by  the  proposed  legislation. 

Mr.  Sinclair.  It  has  been  contended  here  by  the  representatives  of 
the  packers  that  they  do  not  need  any  legislation  at  all. 

Mr.  Tincher.  Their  position  is  to  strike  out  all  after  the  enacting 
clause  in  all  the  bills  pending. 

Secretary  Wallace.  Then,  perhaps  it  would  be  agreeable  if  I 
would  simply  discuss  the  general  proposition. 

Mr.  Gernerd.  Yes,  sir. 

Secretary  Wallace.  And,  of  course,  you  have  got  to  approach 
it  with  the  idea  that  your  purpose  is  to  promote  the  orderly  marketing 
of  live  stock  with  the  fewest  possible  abuses  and  inequalities  and 
injustices.  When  you  come  to  consider  the  live-stock  business, 
it  is  one  great  business  to  which  there  are  some  five  or  six  different 
parties.  For  example,  you  start  with  the  producer.  He  takes  his 
stock  to  the  local  station  for  shipment.  He  either  sells  it  to  a local 
buyer,  or  in  the  case  of  the  larger  producer,  he  ships  it  himself  to 
Chicago.  The  railroad  comes  in  then  as  one  of  the  parties  necessary 
to  the  carrying  on  of  the  business.  The  shipper  has  consigned  the 
stock  to  some  commission  man  and  that  commission  man  acts  as 
his  agent  and  sells  the  stock  to  the  packer  or  to  the  eastern  buyer  or 
to  the  local  trader.  First,  before  the  commission  man,  the  yard 
enters  as  one  of  the  parties,  because  the  stock  must  be  unloaded,  it 
must  be  yarded,  it  must  be  fed  and  watered,  and  then  your  com- 
mission man  enters. 

Then  comes  the  packer,  if  it  is  the  packer  who  buys  the  stock,  and 
after  the  packer  kills  it  the  railroad  enters  again  and  handles  the 
meat  products  such  as  are  shipped  out  from  that  packing  point,  and 
then  your  wholesaler — in  most  cases  the  packer  himself,  through  his 
branch  house — and  then  your  retailer. 

These  are  all  parties  to  the  one  great  business,  and  I think  I hardly 
need  to  say  that  the  live-stock  business  is  a very  essential  business 
to  the  agricultural  prosperity  of  the  country. 

No  doubt  as  time  goes  on  and  the  population  increases  the  amount 
of  grain  that  is  fed  to  live  stock  will  decrease,  because  in  the  final 
analysis,  when  we  are  in  a struggle  for  food,  as  they  are  in  China, 
it  is  more  costly  to  get  that  food  through  the  live  stock  than  it  is  to 
get  it  direct;  but  we  have  not  reached  that  point.  In  an  effort  now 
to  maintain  the  fertility  of  the  soil  we  should  encourage  the  live- 
stock business  just  as  far  as  we  can,  and  we  should  remove  from  that 
business  anything  which  tends  to  discourage  it. 

As  to  the  matter  of  legislation  and  how  you  are  goin<*  to  do  that, 
I will  say  frankly  that  I think  legislation  is  very  desirable  now. 

Every  time  we  have  one  of  these  periods  of  depression  in  the  live- 
stock business,  when  prices  are  unreasonably  low,  we  have  a great 
outcry  against  the  packers.  When  I was  on  a farm,  in  the  late 
eighties,  I attended  meetings  of  the  Improved  Live  Stock  Breeders’ 
Association,  and  at  that  time  we  had  the  same  sort  of  speeches  con- 
cerning what  we  called  the  “big  four”  that  we  have  had  in  recent 


MEAT  PACKER. 


231 


years  concerning  the  “big  five,”  and  the  same  criticisms  and  the  same 
charges  that  they  were  combining  to  control  the  markets.  Then, 
when  business  got  more  prosperous,  the  criticism  rather  died  out, 
because  we  were  going  along  fairly  happy,  we  were  making  money, 
and  then  we  sort  of  forgot  about  it.  Then  we  got  into  another  de- 
pression, and  the  same  thing  occurred  over  again. 

In  other  words,  you  have  exactly  the  same  experience  in  the  live- 
stock business  that  you  have  had  in  the  grain  business.  During 
those  periods  we  had  the  same  demands  for  wiping  out  the  boards 
of  trade. 

The  evidence  has  shown  very  clearly  that  while  many  of  these 
criticisms  are  probably  not  justified,  there  are  many  others  that  are 
very  fully  justified,  and  as  time  goes  on  and  we  learn  more  about 
them  the  criticism  becomes  more  severe,  and  then  the  consumer 
comes  in.  All  of  that  is  damaging  to  the  live-stock  business.  It 
tends  to  impair  the  standing  of  ml  the  parties  to  that  business,  and  I 
think  that  legislation  tending  to  correct  these  evils  is  very  necessary, 
not  only  from  the  standpoint  of  the  producer  and  from  the  stand- 
point of  the  consumer,  but  from  the  standpoint  of  the  packer  him- 
self. 

I have  not  been  able  to  understand  why  the  packers  should  take 
the  position  of  absolute  opposition  to  any  legislation.  They  are  sub- 
jected to  the  fire  of  this  criticism  all  the  time,  to  investigations  of 
one  sort  or  another,  and  they  are  compelled  to  maintain  men  here 
and  there  in  an  effort  to  protect  their  interests.  I should  think  they 
would  welcome  reasonable  supervisory  legislation,  which  would  put 
an  end  to  that  sort  of  thing  and  which  would  give  them  a ready 
answer  that  “ Uncle  Sam  is  supervising  us,  and  your  criticism  should 
be  directed  to  him  rather  than  to  us.” 

As  to  what  the  legislation  should  be,  you  have  outlined  it,  I think, 
splendidly  in  the  paragraphs  of  this  bill  on  pages  4 and  5.  Under 
that  language  you  forbid  combining  to  fix  prices  and  would  do  away 
with  a number  of  other  practices  to  which  you  have  referred  there. 

How  you  are  going  to  enforec  that  is  a question  your  chairman 
suggests  I should  speak  of.  Let  me  say,  to  begin  with,  that  as 
Secretary  of  Agriculture  I am  not  seeking  any  new  job.  I have  got 
plenty  to  do  as  it  is,  and  the  regulatory  work  of  the  department  is 
the  most  trying  work  that  I have  to  do.  As  you  know,  we  admin- 
ister a number  of  these  regulatory  laws,  some  20  or  30  of  them,  and 
the  final  appeal  in  each  case  may  come  to  the  Secretary.  So  I am 
not  looking  for  any  new  job,  and  if  I should  suggest  that  this  should 
he  under  the  Department  of  Agriculture,  it  would  be  not  because  I 
want  to  cover  any  more  work  into  that  department,  but  because 
that  may  seem  to  be  the  logical  place. 

Mr.  Gernerd.  We  would  hardly  put  it  under  the  Secretary  of  the 
Interior. 

Secretary  Wallace.  No.  Of  course,  we  are  not  dodging  any 
responsibility  that  it  seems  wise  to  place  on  us,  but  we  are  not 
seeking  it. 

You  spoke  of  the  stockyards  administration  being  under  the 
Interstate  Commerce  Commission.  On  first  thought,  that  seems  to 
be  the  logical  thing  to  do.  You  think  of  the  stockyards  as  you 
would  of  a terminal  depot,  a freight  house.  It  would  seem  to  be  a 
part  of  your  transportation  system;  but  when  you  come  to  deal 


232 


MEAT  PACKER. 


with  it  in  a practical  way,  there  are  a number  of  difficulties  that 
come  up  in  separating  the  stockyards  proper  from  the  activities 
which  go  on  in  the  stockyards. 

If  any  of  you  go  into  the  stockyards,  as  no  doubt  many'  of  you 
have,  and  ride  through  them,  the  separation  between  the  operations 
of  the  stockyards  as  stockyards  and  the  business  which  is  going  on 
in  those  stockyards  will  become  very  difficult;  you  will  not  know 
which  man  is  a stockyards  man  and  which  man  is  a commission  man 
and  which  man  is  a packer  man.  The  cattle  are  unloaded  there  and 
theoretically  they  are  unloaded  by  the  stockyards  employees,  but 
practically  the  commission  man  to  whom  the  cattle  are  consigned 
does  a good  deal  of  the  unloading,  because  he  feels  that  he  must  do 
that  in  order  to  protect  the  interest  of  his  customers.  The  stock- 
yards  furnishes  the  pens  and  furnishes  the  water  as  well  as  the  feed. 
The  commission  men,  however,  order  the  feed.  They  buy  it  from 
the  yards  people.  The  stockyards  people  do  the  weighing.  In  the 
practical  handling  of  the  thing,  I question  whether  it  is  wise  to 
separate  the  stockyards  and  put  them  under  one  supervisory  body 
and  put  the  packers  and  commission  men  under  another,  just  as  a 
matter  of  practical  administration. 

Suppose,  for  example,  you  have  the  stockyards  under  the  Inter- 
state Commerce  Commission  and  some  abuse  comes  up  which  should 
be  corrected.  What  will  be  your  process?  You  will  file  an  infor- 
mation, an  examiner  must  be  sent  to  deal  with  the  matter,  and  if 
the  business  is  not  sufficient  to  enable  them  to  set  up  special  ex- 
aminers who  have  real  knowledge  of  the  live-stock  business,  you  are 
under  some  difficulties  in  presenting  your  case  to  them. 

If  the  matter  should  be  under  the  control  of  one  supervisory  body, 
which  would  have  an  agent,  a competent  man  supervising  the  whole 
thing,  many  of  the  things  which  would  come  up  in  the  operation  of 
the  yards  and  in  the  handling  of  the  stock,  could  be  settled  in  an 
informal  conference  without  any  hearing  and  without  any  delay. 

So  that,  just  as  a practical  matter  of  administering  the  law,  I am 
rather  inclined  to  the  opinion  that  while  logically  the  stock  yards 
are  a part  of  the  common  carrier  system,  practically,  a law  of  this 
kind  could  better  be  administered  under  one  supervisory  body. 
I am  not  insisting  on  that  because  you  perhaps  can  devise  ways  to 
simplify  the  matter,  if  they  should  go  under  the  Interstate  Com- 
merce Commission;  but  tke  easy  way  would  be,  I think,  as  I have 
suggested. 

Mr.  Tincher.  Mr.  Secretary,  if  Congress  should  pass  legislation 
placing  the  packers  and  the  stockyards  under  some  regulatory  power, 
I have  always  contended,  I do  not  know  whether  I am  right  or  not, 
that  it  did  not  make  much,  if  any,  difference,  who  owned  the  stock- 
yards;  and  that  a decree  or  any  arbitrary  ruling  that  the  packers 
should  not  own  any  interest  in  them  might  be  injurious  to  trade,  so 
long  as  they  were  regulated  properly,  and  I would  like  to  have  you 
go  into  that  matter  because  it  is  involved  in  this  legislation.  You 
understand  we  have  a decree  now  that  is  supposed  to  divorce  them 
from  the  stockyards. 

Secretary  Wallace.  Yes.  It  is  rather  hard  to  form  a clear 
opinion  on  that  matter.  You  understand  the  grounds  for  the  objec- 
tions to  the  packers  owning  the  yards.  It  enabled  them,  if  they 
should  choose,  to  make  it  very  difficult  for  a competing  packing 


MEAT  PACKER. 


233 


plant  to  get  into  those  yards;  that  is,  they  could  control  the  location, 
the  matter  of  putting  in  switches,  and  the  ordinary  conveniences 
necessary  to  the  efficient  conduct  of  a packing  business;  and  there 
seemed  to  be,  I think,  evidence  to  show  that  at  times  the  packers 
who  owned  the  yards  did  throw  difficulties  in  the  way  of  competing 
packers  going  in  there.  I think  that  was  the  basis  for  the  criticism 
of  packer  ownership. 

Mr.  Aswell.  Do  you  know  wffiether  they  are  doing  that  now  ? 

Secretary  Wallace.  No;  I can  not  speak  from  personal  knowledge 
of  that. 

Mr.  Aswell.  I wondered  whether  they  had  desisted  from  that 
practice. 

Secretary  Wallace.  Of  course,  under  that  decree,  they  are  getting 
rid  of  their  stock  in  the  yards  now. 

Mr.  Tincher.  The  only  possible  excuse  for  not  divorcing  them  from 
the  yards  would  be  to  put  the  yards  and  the  packers  under  proper 
regulation ; but  it  seemed  to  me  to  be  a good,  big  investment,  and  to 
be  kindred  to  the  packing  interests,  and  I wondered  whether,  under 
proper  regulations,  the  ownership  of  the  yards  was  very  material. 

Secretary  Wallace.  If  you  could  have  proper  supervision  I can 
not  see  where  it  is  important  one  way  or  the  other,  but  you  must 
have  really  proper  and  efficient  supervision. 

The  whole  business  has  got  to  be  such  a tremendous  business  and 
so  interrelated,  that  I think  if  you  can  get  real  supervision  it  is  far 
better  than  to  undertake  to  take  it  to  pieces  and  separate  it;  and  I 
want  to  say  that  the  packing  business  is  an  absolute  necessity  to 
the  carrying  on  of  the  live-stock  business. 

If  we  are  on  permanently  higher  railroad  freight  rates;  for  ex- 
ample, if  the  present  rates  should  continue,  the  tendency  of  these 
rates  will  be  to  distribute  this  packing  business  much  more  widely 
than  it  has  been  distributed.  It  has  been  built  up  on  the  cheap 
long  haul;  so  that  we  have  been  sending  our  cattle  and  hogs  and 
sheep  to  a few  large  central  markets  because  that  seemed  to  be  the 
economical  way  to  do  it;  but  if  wTe  are  on  a permanently  higher, 
or  a substantially  higher,  level  of  freight  rates,  then  you  have  made 
it  easier  for  the  establishment  of  small  pacldng  plants  scattered 
throughout  the  producing  country. 

But  any  legislation  or  any  rules  or  regulations  wdiich  really  impair 
the  efficiency  of  the  packing  business  will  cause  hardship,  not  to  the 
packers  so  much  as  to  the  producers,  because  the  packer,  if  he  con- 
tinues in  business,  must  have  his  manufacturing  profit,  and  he  is  in 
a position  to  get  that  manufacturing  profit.  If  he  does  not  get  it, 
his  life  in  the  business  will  be  governed  simply  by  the  length  of  his 
purse.  When  he  has  used  up  his  surplus  he  is  out. 

If  you  impose  undue  hardships  or  additional  expenses  or  difficulties 
of  doing  business  on  the  packer,  he  will  pass  those  on  to  the  producer 
of  the  live  stock,  so  that  while  I regard  it  as  absolutely  necessary  that 
you  should  have  efficient,  supervisory  legislation,  at  the  same  time 
you  have  got  to  keep  in  mind  all  the  time  that  the  integrity  of  the 
packing  business  must  be  maintained  for  the  interests  of  the  producers 
and  the  consumers,  even  more  than  for  the  interests  of  the  packers. 

Mr.  Aswell.  Mr.  Secretary,  will  you  discuss  the  proposition  of  a 
special  commission  as  compared  with  having  the  Federal  Trade  Com- 
mission take  charge  of  this  matter? 


234 


MEAT  PACKER. 


Secretary  Wallace.  I think  the  interests  of  the  public  will  be 
served  if  you  put  all  of  this  thing,  and  all  of  this  control  and  regula- 
tion, in  the  hands  of  one  supervisory  body  and  not  distribute  it 
among  several. 

Mr.  Aswell.  I mean  that  one  of  these  bills  gives  the  control  to  the 
Federal  Trade  Commission  and  the  other  gives  it  to  a special  com- 
mission. 

Mr.  Clague.  And  one  to  the  Secretary  of  Agriculture. 

Mr.  Aswell.  Yes;  that  has  already  been  discussed. 

Secretary  Wallace.  Of  course,  the  main  argument  for  placing  it 
in  the  Department  of  Agriculture,  is  that  we  have  a number  of  ac- 
tivities in  the  yards  and  in  connection  with  the  marketing  of  the 
products.  We  have  our  Bureau  of  Markets,  which  has  a number  of 
men  there,  and  our  Bureau  of  Animal  Industry  has  almost  400  em- 
ployees in  Chicago  alone.  I was  there  one  night  a month  ago  and 
sent  out  word  that  I would  be  glad  to  meet  the  employees  of  our 
department,  and  I think  they  told  me  there  were  400  of  them  in  the 
Bureau  of  Animal  Industry  alone  connected  with  the  packing  plants 
there.  So  that  we  have  got  a very  large  organization  dealing  with 
the  packing  and  marketing  of  meat  products  throughout  the  country, 
and  I think  that  is  one  of  the  main  arguments  why  the  matter  should 
be  put  in  the  hands  of  the  Department  of  Agriculture. 

Another  reason  is  that  the  Department  of  Agriculture  is  looked 
upon,  I think,  by  the  farmers  of  the  country  and  by  the  stockmen, 
as  being,  perhaps,  more  closely  in  sympathy  with  the  agricultural 
business  than  any  other  department;  and  having,  perhaps,  a better 
knowledge  of  it  than  either  the  Interstate  Commerce  Commission  or 
the  Federal  Trade  Commission,  or  any  other  commission.  I do  not 
mean  to  boast  of  the  Department  of  Agriculture,  but  I think  it  will 
be  generally  conceded  that  the  department  is  looked  upon  in  that 
way. 

Mr.  Aswell.  And  I think  rightly  so. 

Secretary  Wallace.  We  have  a large  number  of  people  who  are 
very  well  informed,  certainly,  on  agriculture.  So  that,  from  that 
standpoint,  I think  it  would  be  wiser  to  put  this  matter  in  the  depart- 
ment rather  than  in  the  hands  of  some  commission  which  was  not  so 
closely  related  to  agriculture. 

Mr.  Aswell.  And  it  would  probably  be  more  economically  ad- 
ministered. 

Secretary  Wallace.  Having  a large  number  of  men  closely  iden- 
tified with  that  business,  perhaps  it  would  be  more  economically 
administered. 

Mr.  Clarke.  Mr.  Secretary,  with  your  employees  out  there,  do  you 
find  any  tendency  on  the  part  of  the  packers  to  refuse  information  or 
facilities  for  whatever  their  specific  work  is  ? 

Secretary  Wallace.  I think  there  are  very  few  difficulties  experi- 
enced by  our  men  in  carrying  on  their  special  work.  But  you  under- 
stand that  the  work  we  do  there  now  does  not  include  the  gathering 
of  information  dealing  with  the  matter  you  are  considering  at  all. 

What  we  need,  as  I see  it,  to  meet  this  situation  is,  first,  such  legis- 
lation as  you  have  here  in  section  203;  second,  an  organization  which 
can  enforce  that  legislation  so  far  as  it  can  be  enforced;  and  third,  such 
additional  authority  as  may  be  needed — and  I do  not  know  how  much 
that  might  be,  perhaps  none — do  inquire  into  this  whole  thing.  In 


MEAT  PACKER. 


235 


fact,  I think  you  should  approach  this  on  exactly  the  same  principle 
that  you  approached  the  matter  of  future  trading. 

There  is  a great  deal  of  information  we  do  not  have,  and  have  no 
means  of  getting  now.  I think  we  should  consider  this  legislation  or 
other  legislation  of  this  sort  in  this  light:  That  our  purpose  is  to  try 
to  put  this  business  of  killing  and  marketing  live  stock  on  a thoroughly 
sound  business  basis,  having  in  mind  the  interests  of  the  producers 
and  the  interests  of  every  factor  to  the  business,  and  the  interest  of 
the  consumer  at  the  other  end. 

As  it  is  now,  we  are  subject  to  very  wide  fluctuations.  The  price 
goes  way  up  and  production  is  encouraged  in  response  to  that  price, 
and  the  result  is  we  overproduce  and  then  the  price  drops  way  down 
so  far  that  production  is  greatly  discouraged;  and  so  we  have  these 
extreme  ups  and  downs. 

The  farmers  of  this  country  could  produce  our  live  stock  at  a sub- 
stantially lower  price  if  you  could  take  off  these  extraordinarily  high 
prices  and  cut  out  the  extraordinarily  low  prices  and  more  nearly 
equalize  the  supply  and  the  price.  It  seems  to  me  we  have  got  a 
great  piece  of  constructive  work  in  studying  that  whole  game,  and 
this  is  just  a part  of  it.  This  is  in  one  sense  a beginning — the  matter 
you  are  considering  here. 

You  want  to  take  away,  as  I understand  it,  any  reasonable  cause 
for  complaint  by  the  producer  or  consumer  against  the  packer  and 
against  the  stockyards  and  against  the  commission  man. 

Mr.  Clarke.  Mr.  Secretary,  do  not  those  same  conditions  obtain  in 
every  business  in  the  country,  whether  it  be  individual  or  corporate 
or  otherwise. 

Secretary  Wallace.  Not  to  anything  like  the  same  extent. 

Mr.  Clarke.  Not  to  the  same  extent? 

Secretary  Wallace.  No;  nothing  to  compare  with  it.  For  exam- 
ple, in  a manufacturing  enterprise  they  can  adjust  their  production 
to  the  probable  need.  They  can  measure  and  anticipate,  to  some 
extent,  the  possible  demand  and  adjust  their  production  to  it.  You 
have  got  that  illustrated  in  the  steel  business,  for  example,  where  a 
year  ago  your  steel  mills  cut  down  their  production  about  35  per  cent, 
anticipating  the  lessened  demands.  You  have  there  a much  more 
stable  business  than  you  have  in  either  the  live  stock  or  the  grain 
business. 

Mr.  Clarke.  What  I had  particularly  in  mind  was  that  I know  of  a 
manufacturer  in  New  York  State  who  has  had  his  agents  throughout 
the  country  for  the  last  three  months,  I think,  and  he  has  told  me  that 
in  hardly  a single  place  has  he  been  able  to  secure  any  sales. 

Secretary  Wallace.  Of  course  we  have  a very  unusual  condition 
in  the  country  just  now. 

Mr.  Clarke.  I realize  that. 

Secretary  Wallace.  But,  speaking  generally,  the  production  of 
live  stock  and  the  production  of  grain  are  subject  to  more  violent 
fluctuation,  wholly  without  regard  to  cost  of  production,  than  any 
other  business  in  the  whole  country. 

Mr.  Gernerd.  In  fact,  the  cost  of  production  is  not  taken  into 
consideration. 

Secretary  Wallace.  It  is  never  taken  into  consideration  and  has 
not  been  taken  into  consideration  on  the  part  of  the  buyer;  no. 


236 


MEAT  PACKER. 


Mr.  Gernerd.  After  all,  Mr.  Secretary,  is  not  that  the  basis  that 
this  country  has  got  to  go  upon  in  the  growing  of  crops  and  the  raising 
of  cattle?  Has  not  a price  stabilizing  cost  of  production  got  to  be 
realized  before  there  is  going  to  be  real  prosperity  and  happiness  in 
this  country? 

Secretary  Wallace.  I think  there  is  no  question  as  to  that.  I do 
not  mean  to  say  that  we  can  set  up  a price. 

Mr.  Gernerd.  No;  I do  not  mean  a Government  fixed  price;  but 
putting  the  business  on  such  a basis  that  they  can  approximate,  cer- 
tainly, a price  that  will  be  based  on  cost  of  production. 

Secretary  Wallace . Yes. 

Mr.  Ten  Eyck.  It  is  not  your  idea,  of  course,  Mr.  Secretary,  that 
we  can  legislate  prices  in  any  way. 

Secretary  Wallace.  No;  not  at  all. 

Mr.  Ten  Eyck.  But  by  giving  a certain  bureau  more  power  and 
with  proper  regulatory  laws,  we  may  bring  about  a better  understand- 
ing between  the  packer  and  the  farmer,  and  thereby  keep  a more 
even  level  of  prices. 

Secretary  Wallace.  If  you  can  begin  by  eliminating  abuses  which 
have  crept  into  the  business,  that  is  a good  beginning,  and  gradually 
as  we  get  into  that  matter  and  get  more  information  and  study  it 
from  the  affirmative  and  constructive  side,  we  will  learn  a little  more 
each  year  and  perhaps  in  time  may  be  able  to 

Mr.  Ten  Eyck  (interposing) . Bring  about  a better  understanding. 

Secretary  Wallace.  Yes;  unquestionably. 

Mr.  Aswell.  Mr.  Secretary,  the  dominant  idea  in  the  grain  futures 
bill  was  that  of  publicity.  Is  it  your  opinion  that  that  should  be  the 
dominant  idea  in  this  bill  ? 

Secretary  Wallace.  I think  there  should  be  very  free  publicity  in 
this  bill;  yes. 

Mr.  Clague.  That,  together  with  general  regulations. 

Secretary  Wallace.  Yes;  you  have  got  to  have  the  necessary 
authority. 

Mr.  Aswell.  Publicity  does  a lot  toward  regulation. 

Mr.  Clague.  Yes;  I agree  with  you  on  that. 

Secretary  Wallace.  Publicity  will  naturally  follow  the  operation 
of  this  law. 

Mr.  Aswell.  And  publicity  will  help  to  regulate. 

Secretary  Wallace.  It  will  help;  yes. 

Mr.  McLaughlin  of  Nebraska.  Mr.  Secretary,  a while  ago  you 
were  suggestiong  that  the  entire  supervision  of  the  law  be  placed 
under  one  head.  I was  interested  in  that  because  it  has  occurred  to 
me  there  might  be  a number  of  instances  arise  where  there  would  be 
conflict  as  to  authority.  For  example,  suppose  you  wanted  to  in- 
vestigate a wiring-on  process,  which  has  been  an  evil  in  the  past,  or 
suppose  you  wanted  to  investigate  wdiat  seemed  to  be  an  intentional 
delay  in  weighing  for  the  purpose  of  getting  greater  shrinkage,  you 
would  start  an  investigation  along  those  lines,  you  would  find  after 
pursuing  that  line  a while,  that  it  led  into  the  stockyards,  and  that 
the  fault  was  probably  there.  Then  you  would  have  to  call  in  the 
Interstate  Commerce  Commission  or  whatever  other  body  was  the 
supervising  power  for  that  part  of  it  and  turn  it  over  to  them  from 
that  point,  and  in  the  case  of  a hearing  involving  both  packers  and 
stockyards,  there  might  be  a possible  case  of  disagreement  between 


MEAT  PACKER. 


237 


the  two  supervisory  bodies  as  to  what  was  the  proper  course  to  pursue, 
and  therefore,  occasion  delay  if  not  even  friction.  So  it  seems  to  me 
there  are  many  reasons  why  your  contention  is  valid,  that  the  super- 
visory authority"  should  be  placed  in  one  head  or  in  one  department. 

Secretary  Wallace.  Well,  take  a practical  illustration.  Here  is  a 
commission  firm  that  has  a bunch  of  stock  which  is  sold  for  one  of  its 
customers,  and  for  some  reason  or  another  there  is  a delay  of  twx>  or 
three  hours  in  getting  that  stock  to  the  scales  after  the  sale  has  been 
completed.  Now,  you  understand  that  any  delay  in  selling  after  the 
sale  has  been  completed  is  usually  to  the  disadvantage  of  the  seller, 
because  the  cattle  or  the  hogs  are  shrinking.  If  you  have  one  super- 
visory agency  and  that  agency  has  a head  man  at  the  yards,  what 
would  be  the  procedure  in  a case  of  that  kind  ? He  would  informally 
call  in  these  people  that  afternoon  or  that  evening  while  the  thing  is 
fresh,  and  they  would  settle  the  matter.  If  it  was  clear  that  damage 
had  been  done  to  this  shipper  because  of  that  delay  they  would  prob- 
ably settle  it  right  there  and  adjust  the  matter  and  be  done  with  it. 
Suppose  you  have  the  authority  there  divided  and  the  commission 
men  are  under  one  agency  and  the  stockyards  under  the  other 
agency.  You  have  got  to  bring  a complaint.  You  have  got  to  show 
evidence  as  to  the  loss  suffered  and  all  that  sort  of  thing,  and  then  it 
comes  on  for  a hearing  some  time  afterwards,  and  possibly  before 
some  man  who  does  not  understand  the  practical  operation  of  the 
yards.  You  know  that  business  there  is  done  in  a sort  of  rough  and 
ready  way,  and  done  quickly,  and  on  the  mere  nod  of  the  head  or  a 
word.  It  is  quite  different  from  many  other  lines  of  business. 

Mr.  Aswell.  Mr.  Secretary,  is  it  important  as  to  who  owns  the 
refrigerator  cars  ? 

Secretary  Wallace.  I will  have  to  confess  I can  not  contribute 
much  light  on  the  refrigerator  car  proposition.  It  is  important  that 
the  refrigerator  cars  be  available  promptly  and  that  they  be  kept 
clean  and  that  they  be  properly  iced,  and  that  everything  about  them 
should  be  kept  in  a highly  efficient  state,  but  whether  the  packers 
own  them  or  the  railroads  own  then,  they  must  be  available  and  they 
must  be  kept  in  fine  condition.  I think  the  objections  to  the  owner- 
ship of  the  refrigerator  cars  by"  private  concerns  are  that  it  gives  them 
an  undue  advantage.  On  the  other  hand,  I was  talking  to  a small 
packer  in  Des  Moines  about  that  matter  and  he  says  that  the  difficulty 
with  the  refrigerator  cars  owned  by  the  railroads  is  that  they  come  to 
them  dirty.  They  are  not  maintained,  and  they  have  a great  deal 
of  difficulty  because  of  that.  I do  not  feel  competent  to  discuss  that 
phase  of  the  matter,  gentlemen,  I will  tell  you  frankly.  I have 
looked  into  it  a good  deal  and  studied  it  a good  deal,  but  I do  not 
know. 

Mr.  Gernerd.  There  can  not  be  many  abuses  along  that  line  or 
we  would  have  heard  from  them. 

Secretary  Wallace.  There  has  been  a great  deal  of  complaint, 
and  I think  in  times  past  a great  deal  of  that  has  been  justified,  as  to 
the  use  of  the  refrigerator  cars  and  the  advantage  it  gives  over  a small 
concern  which  is  not  able  to  maintain  them. 

Mr.  Ten  Eyck.  Would  it  be  advantageous,  if  this  authority  was 
put  under  the  Secretary  of  Agriculture,  to  give  him  some  power  with 
regard  to  the  inspection  of  those  cars  when  they  are  delivered  for  use, 
and  with  regard  to  any  delay  in  delivering  the  cars. 


238 


MEAT  PACKER. 


Mr.  Aswell.  That  is  up  to  the  Interstate  Commerce  Commission. 

Mr.  Ten  Eyck.  The  inspection  of  the  car  is  not  up  to  the  Inter- 
state Commerce  Commission.  The  delivery  of  the  car  is  up  to  the 
Interstate  Commerce  Commission,  and  it  might  be  well  in  this  bill 
to  delegate  to  the  Secretary  of  Agriculture  authority  to  see  that  these 
cars  are  properly  cleaned  and  so  on.  I think  it  is  a good  thing  for 
the  consumer  to  do  that. 

Secretary  Wallace.  Of  course,  they  must  be  kept  in  a thoroughly 
sanitary  condition. 

Mr.  Gernerd.  But  to-day  there  is  no  supervisory  work  being  done, 
so  far  as  inspection  of  the  refrigerator  car  is  concerned,  is  there  ? 

Mr.  Tincher.  Oh,  yes. 

Secretary  Wallace.  I think  the  packers  exercise  a great  deal  of 
care  about  that. 

Mr.  Gernerd.  I mean  governmental  supervision. 

Secretary  Wallace.  I could  not  answer  that. 

Mr.  Ten  Eyck.  We  are  talking  now  for  the  independent  men  who 
have  to  hire  the  railroad  cars. 

Secretary  Wallace.  I can  not  answer  as  to  how  they  are  inspected, 
but  the  packer  who  gets  them,  for  his  own  protection,  makes  sure 
that  they  are  clean  and  sanitary  and  properly  taken  care  of. 

Mr.  Ten  Eyck.  Yes;  but  he  should  not  be  put  to  that  expense. 
That  is  an  additional  expense  to  the  independent  packer  as  against 
tke  large  car  owner. 

Mr.  Aswell.  Does  not  the  large  packer  have  to  keep  his  cars  clean 
as  well  as  the  small  one  ? 

Mr.  Ten  Eyck.  Yes;  but  he  puts  that  into  the  cost  of  operating 
that  car  and  makes  a profit  on  the  car  or  at  least  runs  it  without  a 
loss;  but  when  you  hire  the  car  and  pay  the  same  freight  to  the 
railroad  that  the  other  man  does,  who  is  making  a profit  or  at  least 
running  his  car  service  without  a loss,  any  additional  cost  put  upon 
the  independent  man  to  clean  the  railroad’s  car  is  an  additional  cost 
to  that  man. 

Mr.  Clarke.  I think  that  is  largely  theoretical. 

Mr.  Ten  Eyck.  There  was  testimony  here  to  the  effect  that  that 
was  one  of  the  bad  features  about  it. 

Mr.  McLaughlin  of  Nebraska.  Railroad-owned  refrigerator  cars  are 
now  inspected  under  the  pure  food  act. 

Mr.  Aswell.  Yes. 

Mr.  Ten  Eyck.  I was  merely  bringing  out  the  point  that  it  has 
been  stated  that  these  cars  come  in  in  bad  condition  and  that  they 
were  not  doing  their  duty  if  that  was  the  case. 

The  Chairman.  Mr.  Secretary,  I understood  you  to  say  that  you 
would  be  in  favor  of  substituting  the  Secretary  of  Agriculture  for  the 
Interstate  Commerce  Commission. 

Secretary  Wallace.  I think,  Mr.  Chairman,  it  would  be  wise  to 
put  it  under  one  supervisory  body. 

The  Chairman.  Have  you  any  other  suggestions  or  any  other 
amendments  to  the  various  bills  that  are  before  the  committee  that 
you  would  suggest  ? 

Secretary  Wallace.  No;  I have  not,  Mr.  Chairman.  These  bills 
are  the  result  of  prolonged  hearings.  You  gentlemen  have  given 
great  attention  to  the  drafting  of  the  details.  A large  part  of  the 
bills  deal  with  the  machinery  for  administering  them,  concerning 


MEAT  PACKER. 


239 


which  I am  not  any  more  competent  than  you  are  to  express  an  opinion 
upon.  After  you  have  completed  your  deliberations  and  have  drawn 
the  bill  in  final  form,  I should  like  the  privilege  of  going  over  it  rather 
carefully,  and,  perhaps,  talking  with  you  again  about  it;  but  until 
you  have  reached  that  point,  I do  not  know  that  I can  contribute 
anything  that  will  be  of  benefit  to  you. 

The  Chairman.  I might  say  that  in  drafting  the  bill  no  one  seemed 
to  have  any  particular  interest  in  whether  the  stockyards  should  be 
placed  under  the  Interstate  Commerce  Commission  or  not. 

Secretary  Wallace.  I understand  that. 

The  Chairman.  As  stated  to  you,  it  was  thought  that  they  were 
a part  of  the  transportation  system,  and  it  was  thought  that  possibly 
the  Interstate  Commerce  Commission  might  be  the  proper  body  in 
which  to  lodge  such  supervision;  but  with  the  department  activities 
already  in  the  stockyards  and  with  the  department’s  splendid  accom- 
plishments in  the  stockyards,  hence  the  idea  of  giving  all  the  authority 
to  one  body.  I do  not  believe  there  is  any  serious  difference  of 
opinion  among  the  members  of  the  committee  so  far  as  that  goes. 

Secretary  Wallace.  I understand  that.  I am  quite  sure  you  are 
simply  trying  to  do  the  practical  thing,  and,  of  course,  logically  the 
disposition  is  to  say  that  the  stockyards  should  be  considered  as  a 
part  of  the  transportation  system,  but  in  the  practical  operation  of 
this  measure,  I am  rather  inclined  to  think  it  would  be  better  to  put 
it  all  under  one  supervisory  agency. 

Mr.  Clague.  Mr.  Secretary,  there  is  one  question  you  spoke  about 
that  I would  like  to  have  you  elaborate  on  a little  further.  These 
bills,  or  at  least  some  of  them,  provide  that  none  of  the  packers  shall 
own  any  stock  in  the  stockyards.  As  a shipper  of  live  stock  and  being 
vitally  interested  in  this  measure,  is  it  not  better  that  the  packers 
have  the  right  to  own  some  of  the  stock  of  stockyards  for  the  purpose 
of  keeping  up  those  stockyards;  in  other  words,  so  that  they  would 
have  more  interest  in  keeping  those  yards  in  first-class  condition  ? 
What  we  want  is  the  regulation  of  them. 

Secretary  Wallace.  Yes. 

Mr.  Clague.  And  is  not  that  what  we  need  more  than  being 
interested  in  who  owns  them  ? 

Secretary  Wallace.  If  you  could  have  thoroughly  efficient  regu- 
lation, the  ownership  is  of  very  much  less  importance. 

Mr.  Clague.  That  is  the  point  I wanted  to  get  at. 

Secretary  Wallace.  Yes. 

Mr.  Tincher.  Mr.  Secretary,  the  consent  decree  that  they  entered 
into,  as  I understand  it,  prevented  the  packer  from  selling  meat  or 
any  of  his  products  to  any  one  for  consumption  unless  that  person 
be  an  employee  of  the  packer.  I have  always  had  the  idea  that  that 
was  consent  legislation  by  decree  that  ought  to  be  repealed  by  law. 
Do  you  not  think  that  under  proper  supervision  of  the  packing 
industry  and  with  proper  protection  of  the  consumer,  that  matter 
ought  to  be  left  to  regulation  and  that  the  packer  ought  not  to  be 
forced  to  sell  his  products  to  others  than  the  consumers  % 

Secretary  Wallace.  Inasmuch  as  I said  at  the  time,  publicly,  I 
thought  that  the  forbidding  of  the  packers  doing  retail  business 
destroyed  about  the  last  hope  of  cheapening  distribution,  I suppose 
I will  have  to  answer  your  question  in  an  affirmative  way. 


240 


MEAT  PACKER. 


Mr.  Tincher.  I did  not  know  you  had  said  that,  Mr.  Secretary, 
but  it  shows  how  great  minds  will  run  together. 

Mr.  Purnell.  The  question  is  who  is  the  other  mind  ? 

Mr.  Tincher.  I had  the  pleasure  of  telling  Mr.  Palmer  that  before 
this  committee. 

Secretary  Wallace.  Of  course,  we  know  the  old-time  objection 
of  the  packer  going  into  the  retail  business.  We  know  how  he  drove 
out  the  local  butchers  years  ago  by  selling  at  less  than  a fair  price, 
and  yet  if  we  are  ever  going  to  get  at  the  cheapening  of  distribution, 
it  seems  to  me,  finally,  we  will  work  that  out  with  the  assistance  of 
the  packers,  and  the  same  thing  is  true  in  this  matter  of  shipping 
other  things  in  your  refrigerator  cars,  which  was  also  a part  of  that 
decree. 

Mr.  Jones.  Mr.  Secretary,  if  you  have  not  already  covered  the 
question,  what  do  you  think  about  the  wisdom  of  the  consent  decree 
forbidding  the  packers  from  engaging  in  unrelated  products  and  the 
distribution  of  unrelated  products  $ 

Secretary  Wallace.  Well,  that  opens  up  a big  subject. 

Mr.  Jones.  If  you  do  not  care  to  go  into  that,  that  is  all  right,  but 
I would  simply  like  to  have  your  opinion,  if  you  feel  in  position  to 
give  it. 

Secretary  Wallace.  I am  willing  to  say  this,  gentlemen,  as  the 
business  of  this  country  grows,  and  I am  not  speaking  now  of  the 
packing  .business  any  more  than  of  many  other  lines  of  businesses, 
I think  we  have  got  to  take  a somewhat  different  attitude  as  to  men 
building  up  large  enterprises.  Where  they  contribute  to  efficiency 
and  to  reduced  cost  of  distribution,  I think  our  general  policy  should 
be  that  that  shall  be  permitted  under  thorough  supervision  and 
regulation. 

Mr.  Jones.  In  other  words,  if  they  simply  have  the  same  facilities 
and  no  special  favors,  there  should  be  no  limitation  as  to  what  busi- 
ness a man  or  an  organization  may  go  into. 

Secretary  Wallace.  Of  course,  as  I say,  you  are  opening  up  a very 
large  question  there  that  I hesitate  to  undertake  to  discuss  in  any 
detail  now. 

Mr.  McLaughlin  of  Nebraska.  Mr.  Secretary,  your  statement  with 
reference  to  the  future  attitude  of  the  Government  or  of  the  public 
toward  large  business  interests  suggests  to  my  mind  this  question. 

Let  me  say,  first,  that  the  packers,  the  commission  men.  or  any 
others  that  are  opposed  to  this  regulatory  legislation  seem  to  be 
especially  opposed  to  the  provision  in  any  of  the  bills  where  it  is 
provided  that  the  supervisory  power  may  have  authority  to  make 
rules,  regulations,  and  orders  for  the  purpose  of  carrying  out  the 
provisions  of  the  bill.  They  seem  to  believe  that  everything  in  the 
way  of  a discriminatory  practice  should  be  specified  in  the  bill  and 
made  a direct  matter  of  law.  They  seem  to  have  great  fear  of  the 
rules,  regulations,  and  orders.  My  thought  has  been  that  the  evils 
of  practices  that  obtain  in  a great  business  of  this  kind  are  so  varied 
and  so  changeable  from  time  to  time,  as  a result  of  conditions,  that 
in  order  to  have  an  effective  supervision  it  is  absolutely  necessary 
for  the  supervisory  power  to  have  the  authority  to  establish  rules, 
regulations,  and  orders  from  time  to  time  for  the  purpose  of  enforcing 
the  law.  It  does  not  seem  to  me  that  such  a clause  in  the  bill  affords 


MEAT  PACKER. 


241 


any  occasion  of  fear  of  unduly  exercised  power  on  the  part  of  the 
supervisory  authority.  I should  like  to  have  your  opinion  on  that 
subject,  if  you  care  to  state  it. 

Secretary  Wallace.  I think  I agree  with  you,  as  I understand 
your  position  in  the  matter,  and  yet  I can,  I think,  understand  why 
those  objections  are  raised.  We  all  know  of  what  is  seemingly 
unwarranted  interference  with  the  conduct  of  business.  It  is  quite 
natural  that  men  should  fear  such  a thing,  and  yet,  if  you  are  going 
to  administer  this  law  in  an  intelligent,  efficient,  and  common-sense 
way  you  have  got  to  lodge  discretion  in  the  hands  of  the  supervisory 
power.  I see  no  other  way.  I think  the  attitude  of  the  packers  is 
understandable,  just  as  their  attitude  against  any  legislation  is 
understandable.  Those  men  started  in  a small  way,  back  30  or  40 
or  50  years  ago,  and  they  have  built  up  a tremendous  business  and 
they  have  done  it  as  a result  of  business  initiative  and  enterprise 
and  naturally  they  say,  “You  have  no  more  right  to  regulate  us 
than  any  other  business.”  They  fail  to  see  that  they  have  acquired 
such  a dominance  in  the  meat  industry  of  the  nation  and  the  world, 
and  while  in  one  way  they  are  not  public  utilities,  in  another  way  by 
reason  of  this  dominance  they  must  come  under  the  provisions  that 
you  propose  here. 

Mr.  McLaughlin  of  Nebraska,  In  most  instances  these  com- 
plaints, as  you  stated  a while  ago,  would  be  adjusted  in  a friendly 
way  around  a conference  table  ? 

Secretary  Wallace.  If  your  supervising  agency  recognizes  a 
general  business  that  is  being  carried  on  as  a useful  business,  necessary 
to  the  life  of  the  nation,  I can  not  conceive  of  him  imposing  regula- 
tions that  unnecessarily  and  unfairly  interfere  with  the  orderly  and 
proper  conduct  of  that  business. 

Mr.  McLaughlin  of  Nebraska.  Under  the  provisions  of  all  of  the 
measures  those  believing  that  such  unfair  orders  have  been  issued  or 
advantage  taken  of  them  would  have  recourse  to  the  courts  ? 

Secretary  Wallace.  Certainly;  yes,  sir. 

Mr.  Aswell.  I receive  letters  almost  every  day  from  prominent 
men,  practically  saying  this,  “Cut  out  the  meddling  work,  let  busi- 
ness alone.”  What  do  you  do,  Mr.  Secretary,  when  you  get  them, 
as  I presume  you  do  ? 

Secretary  Wallace.  I laugh;  usually. 

Mr.  Aswell.  These  are  serious  letters. 

Mr.  Tincher.  The  same  fellows  probably  wrote  letters  against 
interfering  with  business  when  we  were  legislating  to  cut  out  the 
rebate,  as  the  man  testified  before  the  committee. 

Mr.  Riddick.  Mr.  Secretary,  one  of  the  provisions  of  this  bill,  it 
seems  to  me,  is  very  practical,  and  that  is  making  shipments  on  cer- 
tain days  in  order  to  prevent  congestion  in  the  stockyards.  I have 
had  this  experience,  coming  from  the  far  West,  that  when  the  people 
reach  the  stockyards  with  their  cattle  there  is  a great  congestion, 
compelling  them  to  sell  the  cattle  at  low  prices  and  when  the  buyers 
can  take  in  the  cattle  at  much  less  than  they  are  worth.  There  is  a 
feeling  among  the  raisers  of  cattle  that  the  real  grievance  they  have 
is  the  violent  fluctuations,  that  the  market  will  go  along  steady  for  a 
week  or  two  and  then  have  a drop-off  when  the  packers  are  able  to 
buy  a tremendous  stock  at  much  less  than  its  value.  Do  you  think 

46985—21 16 


242 


MEAT  PACKER. 


there  is  any  practical  legislation  that  can  provide  for  an  even  flow  of 
stock  to  the  markets? 

Secretary  Wallace.  No;  I do  not.  Wliat  is  more,  I made  a stud}r 
of  the  rates  and  prices  of  livestock  at  Chicago  during  that  period  of 
the  war  when  we  shipped  by  the  zoning  system,  regulating  the  supply, 
and  while  the  supply  was  more  evenly  distributed  during  that  time 
we  never  in  all  our  history  had  such  violent  price  fluctuations  as 
during  that  period.  Apparently,  the  people  thought  that  the  equaliza- 
tion of  the  supply  met  the  situation,  but  as  a matter  of  fact  the  price 
fluctuations  were  the  most  violent  in  all  the  history  of  the  livestock 
business.  I believe  that  the  people  do  not  understand  what  hap- 
pened. 

Mr.  Riddick.  Do  you  think  that  legislation  is  warranted  to  correct 
the  price  fluctuations  ? 

Secretary  Wallace.  It  is  hard  to  say.  It  many  cases  it  would 
not  be  warranted,  I think.  I want  to  be  frank,  the  more  I consider 
this  business  in  a superficial  way  the  less  I seem  to  know  about  it. 
We  lack  that  close-hand  study  of  the  whole  operations  that  we  must 
have  if  we  are  going  to  approach  the  solution  of  the  question  with 
real  intelligence.  We  assume  that  because  they  ship  a lot  of  stock 
on  one  or  two  days  that  that  is  responsible  for  the  fluctuations.  If 
you  are  going  to  succeed  in  an  effort  to  adjust  the  supply  to  the  de- 
mand and  to  make  an  even  flow,  you  have  to  go  back  to  the  time  when 
the  live  stock  is  b.orn.  I would  view  with  great  apprehension  any 
effort  by  legislation  or  by  regulation  to  adjust  the  daily  supply  at 
the  markets.  I think  that  that  trouble  goes  far  back 

Mr.  Tincher  (interposing).  Right  on  that  line,  Mr.  Secretary. 
I do  not  know  of  any  man  who  shipped  stock  while  we  were  working 
under  the  zoning  system  who  would  approve,  from  the  experience 
he  had  in  the  shipments,  of  a regulation  that  would  contemplate  a 
repetition  of  any  such  occurrence.  If  there  is,  I should  like  to  have 
his  name  and  address  and  what  he  is  talking  about  put  into  the  record 
before  we  close  the  hearings.  I agree  with  the  Secretary  and  it  sup- 
ports the  theory  we  have  that  the  packers  should  be  regulated,  that 
we  had  the  greatest  fluctuation  in  the  markets  that  we  ever  had  in 
the  industry. 

Secretary  Wallace.  We  never  had  anything  like  it  before. 

Mr.  Riddick.  Is  it  not  true,  Mr.  Secretary,  that  prices  go  down 
just  when  the  stockyards  are  congested  with  unusual  shipments  ? 

Secretary  Wallace.  No;  it  is  not  always.  If  you  are  interested 
in  that,  I will  be  glad  to  take  up  a study  with  you  covering  a period  of 
20  years.  We  took  each  day  of  the  week  and  studied  the  receipts  and 
prices.  When  you  gentlemen  come  to  take  the  averages  you  would 
be  surprised  at  the  almost  insignificant  difference  in  price  one  day 
from  another  when  you  come  to  deal  wtih  it  in  a large  way.  As  in 
other  matters  we  frequently  form  our  opinions  on  the  daily  move- 
ment without  knowing  the  average  trend.  Such  studies  as  I have 
made  in  the  past  have  tended  to  modify  my  views  on  a number  of 
things  as  to  what  we  need.  One  of  the  biggest  benefits  that  will 
come  out  of  this  effort  will  be  an  actual  knowledge  of  the  manner 
in  which  business  is  conducted  so  we  may  look  at  it  in  a large  way 
and  judge  it  in  a large  way  instead  of  being  influenced  by  our  impres- 
sions based  on  this  day  or  this  week  or  next  day  or  next  week. 


MEAT  PACKER. 


243 


Mr.  Clarke.  How  far  does  the  Government  go  now  in  furnishing 
information  to  the  producers  and  shippers  as  to  shipments  or  what- 
ever information  is  available  ? 

Secretary  Wallace.  We  do  issue  a great  deal  of  statistical  infor- 
mation daily.  I will  be  glad  to  send  you  copies  of  that  material 
that  we  put  out.  The  difficulty  is  that  that  is  not  interpreted — too 
often  just  a lot  of  figures.  It  is  my  desire  to  put  the  greater  part  in 
shape  and  interpret  it  and  to  have  it  done  much  better  than  now. 
I do  not  mean  to  criticize  the  work  that  we  are  doing;  it  is  excellent, 
but  we  have  to  go  further  than  we  have  so  far. 

Mr.  Kincheloe.  There  are  three  bills  pending  before  the  com- 
mittee. The  Anderson  bill  provides  that  the  supervisory  power 
shall  be  in  the  hands  of  the  Federal  Trade  Commission.  The  Haugen 
bill  provides  that  the  supervisory  power  shall  be  under  your  depart- 
ment, and,  I think,  the  McLaughlin  bill  provides  for  a special  com- 
mission to  be  appointed  by  the  President.  Have  you  a conviction 
as  to  which  would  be  the  best  tribunal  ? 

Secretary  Wallace.  I spoke  of  that  a little  while  ago  before  you 
came  in.  I think  it  is  very  important  that  the  authority  should  not  be 
distributed  in  different  organizations  or  commissions  and  that  the 
supervisory  authority  should  all  be  lodged  in  one  commission. 
There  seems  to  be  some  good  reason  why  it  would  be  better  to  put  it 
in  the  Department  of  Agriculture,  because  of  the  large  activities 
we  already  have  that  will  mesh  into  any  new  legislation  or  super- 
vision. We  have  men,  for  example,  in  all  of  these  stockyards  now, 
large  numbers  of  them,  something  like,  as  I remember,  400  in  that  one 
enterprise  in  Chicago. 

Mr.  Riddick.  The  Government  pays  those  400  employees  and  not 
the  packing  companies  ? 

Secretary  Wallace.  Yes;  the  Government. 

Mr.  Jones.  In  connection  with  the  question  that  Mr.  Riddick  was 
asking  you  a little  while  ago,  I have  heard  a great  many  stockmen  in 
my  country  complain  that  when  they  ship  stock  to  a market  and  have 
rejected  the  bid  that  is  made,  if  they  undertake  to  rebill  those  cattle 
to  another  market,  the  men  who  made  the  bid  notify  the  other 
market  and  they  refuse  to  increase,  in  fact,  often  decrease  the  bid 
at  the  other  market  on  the  specific  cattle,  that  the  information  is 
conveyed  by  the  companies  from  the  local  market  to  St.  Louis  or 
Chicago  or  to  the  place  where  the  cattle  is  rebilled.  I wondered 
whether  you  had  had  any  such  experience  ? 

Secretary  Wallace.  You  can  get  a great  deal  of  testimony  to 
show  that  that  has  been  done  in  the  past,  many  times. 

Mr.  Jones.  In  other  words,  force  them  to  sell  on  a congested 
market  by  keeping  the  bidders  in  the  other  markets  advised  ? 

Secretary  Wallace.  I think  you  will  find  in  your  printed  hearings 
quite  a little  testimony  along  that  line  from  men  who  have  had  actual 
experience,  personally,  I take  it. 

Mr.  Tincher.  “Wiring  on.’7  That  is,  they  wire  on  that  the 
market  is  congested  and  not  to  bid  over  a certain  amount. 

Mr.  Riddick.  I understand  that  your  study  has  convinced  you  that 
congestion  at  a local  market  does  not  cause  these  prices  ? 

Secretary  Wallace.  No;  I do  not  mean  to  say  that.  Of  course,  it 
does  at  times  cause  fluctuations.  What  I mean  to  say  is  that  the 
fluctuation  during  week  days  is  very  much  smaller  than  people  gen- 


244 


MEAT  PACKER. 


erally  suppose.  As  I remember,  the  difference  on  the  average  was  a 
very  few  cents  per  hundred  pounds. 

Mr.  Riddick.  While  there  is  open  competition  on  the  market  any- 
one can  go  in  and  buy  a bunch  of  steers  in  competition  with  the 
packers,  of  course;  but  after  all,  they  are  the  only  ones  who  have 
facilities  to  take  care  of  the  large  numbers  of  cattle  that  come  in,  and 
to  that  extent  there  is  a monopoly.  There  is  a common  impression 
among  stockmen,  I know,  that  the  packers  are  able  to  pay  just  about 
what  they  want  to  pay,  and  when  there  is  a large  supply  on  any 
local  market  it  does  bring  about  price  depression — a price  below  the 
average  market  value.  Do  you  think  that  is  an  evil  that  could  be 
corrected  by  legislation,  or  is  that  controlled  by  the  law  of  supply 
and  demand  ? 

Secretary  Wallace.  If  we  had  the  authority  and  the  organization 
to  just  follow  the  cattle  through  from  the  time  they  are  sold  to  the 
packer  until  sold  to  the  consumer,  and  could  make  a really  construc- 
tive study  of  the  whole  operation,  we  would  know  very  much  better 
how  to  correct  some  of  the  practices. 

Mr.  Riddick.  After  all,  publicity  is  the  one  real  thing  that  is 
needed  ? 

Secretary  Wallace.  That  is  certainly  very  helpful.  Publicity 
does  not  cure  all  of  these  things.  We  had  a great  deal  of  publicity 
about  the  retailers  taking  profits,  but  yet  they  seem  to  continue. 
However,  publicity  would  be  very  helpful. 

There  is  one  point  that  I have  been  trying  to  make  here.  I do  not 
know  whether  I have  succeeded  or  not,  and  that  is  this,  that  in  these 
periods  of  depression  whether  in  live  stock  or  grain  or  anything  else, 
when  everyone  who  is  suffering  is  trying  to  find  relief  from  it,  the 
tendency  is  to  legislate,  having  in  mind  only  the  immediate  condi- 
tions. If  we  are  going  to  approach  this  matter  with  a view  to  im- 
proving the  system  generally,  not  only  in  periods  of  depression,  then 
we  need  a constructive  study  of  the  whole  thing.  That  is  something 
that  we  are  lacking  now.  We  have  not  the  information  that  we  must 
have  if  we  are  going  to  undertake  to  deal  with  this  problem  in  the 
large  way.  I assume  that  this  bill  is  the  beginning,  giving  us  the 
opportunity  to  make  that  sort  of  a study.  There  are  a number  of 
things  that  you  can  not  legislate  on  now  and  feel  sure  that  you  have 
done  the  wise  thing,  but  if  you  go  as  far  as  you  have  in  this  bill,  and 
as  you  have  in  some  others,  and  lodge  the  authority  in  the  hands  of 
one  body  and  remove  others  from  the  field  and  open  up  the  way  to 
make  this  sort  of  a study,  then  I feel  that  we  will  make  real  progress. 

Mr.  Purnell.  Leaving  out  the  question  of  fact  as  to  whether  this 
can  be  more  properly  conducted  under  the  department,  from  a dollars- 
and-cents  standpoint,  the  law  could  be  more  economically  adminis- 
tered through  the  Department  of  Agriculture  than  by  the  creation 
of  a separate  board  or  commission  or  by  giving  it  to  an  already  created 
board  ? 

Secretary  Wallace.  Well,  I should  think  that  that  was  probably 
true. 

Mr.  Purnell.  I think  that  is  one  angle  that  we  have  to  look  after 
very  carefully,  because  it  will  cost  considerable  money  to  properly 
make  this  study  and  investigation  ? 

Secretary  Wallace.  Yes,  sir. 


MEAT  PACKER. 


245 


Mr.  Tincher.  As  I understand,  the  Senate  committee,  the  same 
committee  that  reported  out  and  had  passed  the  Kenyon  bill  creat- 
ing a new  commission,  has  reported  out  a bill,  beating  us  to  it,  placing 
the  authority  in  the  Department  of  Agriculture.  I think  they  only 
guessed  about  what  we  were  doing  over  here.  They  had  no  hear- 
ings. 

The  Chairman.  With  a provision  for  a commission  under  the 
Secretary  of  Agriculture. 

Mr.  Tincher.  They  really  do  not  know. 

Mr.  Aswell.  There  seems  to  be  some  value  in  the  point  which  Mr. 
Anderson  made  that  the  Federal  Trade  Commission  is  now  having 
some  sort  of  supervision  over  the  general  industry  and  that  the 
Department  of  Agriculture  would  also  build  up  a system  which 
might  be  conflicting  and  confusing.  That  seems  to  be  one  of  the 
important  points.  You  understand  what  I mean  ? 

Secretary  Wallace.  I agree  with  you  except  as  to  the  conflicting 
statements,  I think  there  is  some  doubt. 

The  Chairman.  As  you  understand,  the  consent  decree  divorced  the 
packers  from  the  ownership  of  the  stockyards,  and  in  drafting  the 
hill  the  subcommittee  thought  better  to  leave  out  the  packers  referred 
to  in  the  decree  ? 

Secretary  Wallace.  Yes,  sir. 

The  Chairman.  Do  you  think  it  is  advisable  at  this  time  to  open 
up  the  question  of  the  consent  decree  ? 

Secretary  Wallace.  Well,  your  judgment  on  that,  Mr.  Chairman, 
is  better  than  mine.  Supervision  is  the  big  thing. 

Mr.  Voigt.  Mr.  Secretary,  as  a general  proposition,  do  you  believe 
in  settling  these  questions  by  decree  of  the  court  for  an  individual 
industry  ? 

Secretary  Wallace.  I am  not  competent  to  express  an  opinion 
on  that,  because  I know  so  little  of  courts  and  decrees. 

Mr.  Tincher.  In  this  decree  the  Government  brought  an  action 
and  the  Attorney  General  said  some  of  the  charges  were  based  on 
existing  law  and  some  of  the  charges,  he  thought  perhaps,  were  not 
covered  by  the  law.  The  packers  and  the  Attorney  General  got 
together  and  agreed  to  the  decree.  Some  portions  of  the  decree,  we 
know,  were  not  in  accordance  with  any  law.  You  do  not  believe, 
Mr.  Secretary,  that  this  Government  is  headed  for  laws  by  decree  ? 

Secretary  Wallace.  Well,  if  you  want  my  opinion,  it  is  not 
favorable. 

Mr.  Tincher.  I do  not  think  that  we  should  pay  any  attention  to 
the  decree  in  passing  this  legislation.  For  instance,  the  decree 
provides  that  a packer  shall  own  no  interest  in  the  stockyards  or  any 
of  his  immediate  associates.  That  would  not  be  a necessary  provi- 
sion if  we  had  proper  regulations,  and  certainly,  if  it  is  necessary  to 
do  it  other  than  by  implication,  Congress  ought  to  repeal  that  part 
of  the  decree  that  prohibits  the  distribution  of  the  products  of  the 
producers  so  the  consumer  can  get  the  products  at  the  right  price. 

I do  not  think  it  would  be  necessary  in  the  law  to  mention  the  decree, 
but  I think  that  the  law  should  be  specific  on  that  subject.  It 
should  be  generally  understood  by  the  country  that  Congress  is  not 
legislating  pursuant  to  a decree,  but  rather  pursuant  to  the  public 
needs. 


246 


MEAT  PACKER. 


Mr.  Voigt.  When  this  decree  was  consented  to  by  both  parties 
there  was  no  testimony  taken.  The  court  ordered  that  within  a 
period  of  two  years  the  five  big  packers  should  divest  themselves  of 
any  interest  in  the  stockyards  and  also  that  they  should  thereafter 
not  engage  in  certain  lines  of  business.  Do  you  think  it  is  a good 
precedent  for  a court  to  establish  a rule  of  that  kind  for  a certain 
industry  or  certain  parts  of  an  industry  when  that  decree  is  not  made 
pursuant  to  any  law ; that  is,  the  court  makes  the  law  in  the  case  ? 

Secretary  Wallace.  I know  nothing  about  these  matters  of  which 
you  speak.  My  impulse  is  to  say  no.  I do  not  think  that  is  im- 
portant, as  I regard  my  opinion  as  valueless  on  that  matter.  In  this 
particular  case  I think  it  was  unfortunate  that  included  in  the  agree- 
ment the  packers  were  prohibited  from  having  to  do  with  the  retail 
meat  business ; I think  that  was  decidedly  unfortunate. 

Mr.  Voigt.  Not  only  that,  but  they  were  also  barred  from  certain 
wholesale  lines  ? 

Secretary  Wallace.  Yes,  sir. 

Mr.  Voigt.  That  may  be  a good  thing  and  it  may  not  be,  but  the 
question  is  whether  it  is  a good  policy  to  permit  a court  to  come 
along  and  to  say  to  five  big  business  concerns  in  this  country  that  they 
shall  not  do  a given  thing. 

I want  to  ask  you  another  question.  You  believe,  of  course,  that 
these  packers  should  be  put  in  actual  competition  with  each  other? 

Secretary  Wallace.  Well,  of  course,  I believe  in  absolute,  free 
competition.  So  far  as  you  can  do  that  by  legislation  I think  it 
ought  to  be  done;  yes. 

Mr.  Voigt.  Do  you  not  think  that  any  bill  reported  by  this  com- 
mittee should  give  the  supervising  agency  power  to  make  such  rules 
and  regulations  as  to  prevent  any  two  packers  from  combining  for 
the  purchase  or  sale  of  their  commodities  ? 

Secretary  Wallace.  Yes;  although  you  are  opening  up  there  a 
question  that  we  will  be  facing  within  10  years.  Of  course  this  is  no 
time  to  discuss  it,  but  I think  the  time  is  coming  when  if  we  can 
successfully  establish  real  Government  supervision  you  are  likely  in 
the  future  to  permit  many  things  that  we  now  forbid. 

Mr.  Voigt.  I agree  with  you,  when  there  is  sufficient  supervision. 

Secretary  Wallace.  When  you  have  real  supervision;  yes. 

Mr.  Voigt.  But  the  report  of  the  Federal  Trade  Commission  finds 
that  the  five  big  packers  for  many  years  have  been,  and  are  now,  in 
an  agreement  for  the  purchase  of  live  animals.  Do  you  think, 
assuming  that  is  true,  that  that  has  been  a good  thing  for  the  farmer 
and  for  the  public  ? 

Secretary  Wallace.  No;  certainly  I do  not  think  it  has  been  a 
good  thing. 

Mr.  Riddick.  Have  we  not  a law  now  covering  that  matter,  if  that 
fact  could  be  proven  ? 

Secretary  Wallace.  You  know  better  about  that  than  I do,  Mr. 
Riddick. 

Mr.  Riddick.  I assume  the  Sherman  antitrust  law  prevents  col- 
lusion for  improper  purposes. 

Mr.  Tincher.  Who  did  it  ever  prevent  from  “colluding”  ? They 
tell  me  that  no  one  ever  went  to  jail  under  that  law. 

Mr.  Clarke.  Is  not  that  a criticism  on  the  Government,  then,  if 
there  be  such  a law  ? 


MEAT  PACKER. 


247 


The  Chairman.  Mr.  Secretary,  one  contention  is  that  in  order 
to  force  out  the  small  packer  and  to  compel  the  dealers  to  buy  the 
products  of  certain  packing  houses,  they  establish  markets  next 
door  and  engage  in  the  retail  business,  thereby  obtain  a monopoly 
and  drive  others  out  of  the  business.  Have  you  any  knowledge  of 
that  ? 

Secretary  Wallace.  I think  I did  not  catch  your  full  question. 

The  Chairman.  It  is  alleged  that  the  practice  of  certain  packers, 
in  order  to  drive  out  the  smaller  packers  or  to  force  the  retailers  to 
buy  their  products,  is  to  establish  a market,  to  engage  in  the  retail 
business  next  door,  and  in  that  way  undersell  and  force  them  out  of 
business  or  force  them  to  buy  from  them. 

Secretary  Wallace.  Of  course,  we  are  all  familiar  with  what  hap- 
pened in  years  past  along  that  line. 

The  Chairman.  I take  it  that  is  what  they  had  in  mind  when 
that  complaint  was  made. 

Secretary  Wallace.  Yes. 

Mr.  Riddick.  Mr.  Secretary,  in  your  study  of  the  prices  paid  for 
live  stock  from  day  to  day  over  a period  of  time,  did  you  also  study 
the  wholesale  prices  charged  ? 

Secretary  Wallace.  No. 

Mr.  Riddick.  Would  not  that  throw  an  interesting  light  on  the 
subject? 

Secretary  Wallace.  Of  course,  we  have  at  times  made  compari- 
sons, but  you  see  we  do  not  have  sufficient  information  to  accurately 
measure  those  things.  Let  me  give  you  an  illustration:  At  a time 
when  hogs  were  dropping  heavily,  the  prices  of  pork  loins  were  going 
up  right  along  at  retail.  The  temptation  is  to  play  that  up  as  an 
iniquitous  thing  that  is  happening,  but  when  you  pursued  the  entire 
product  of  the  hog,  when  you  took  the  bacon  and  the  hams  and  the 
rib  sides  and  the  lard — and,  of  course,  you  have  got  to  take  all  of 
those  things  into  consideration — we  found,  and  I am  not  sure  but 
it  may  be  true  now,  that  the  prices  of  bacon  and  hams  are  high 
relatively  to  the  price  of  the  live  hog,  but,  on  the  other  hand,  the 
price  of  lard  is  low  relative  to  the  price  of  the  live  hog  and  the  price 
of  rib  sides  is  low  relative  to  the  price  of  live  hogs. 

There  is  danger  in  forming  a snap  conclusion  if  you  take  only 
one  of  those  products.  You  have  got  to  make  a constructive  study 
of  all  of  it,  and  there  is  where  we  are  weak  because  we  have  not  the 
foundation  for  making  that  study. 

Mr.  Riddick.  I think  that  one  of  the  important  things  is  to  learn 
more  about  the  wholesale  prices. 

Secretary  Wallace.  Yes;  I think  so. 

Mr.  Riddick.  I think  most  of  the  complaints  from  the  public 
about  the  packers  come  from  the  prices  paid  for  the  product  at  the 
retail  stores,  and  from  a superficial  knowledge  of  the  prices  paid  to 
the  producers,  and  I know  from  a very  superficial  study  of  the  matter 
that  I can  pay  four  different  prices  for  beefsteak  between  my  home 
here  in  this  city  and  the  Center  Market,  and  yet  I presume  all  of 
those  people  are  paying  exactly  the  same  wholesale  price,  and  yet 
one  price  will  be  almost  50  per  cent  less  at  retail  than  the  others. 

Secretary  Wallace.  Yes.  If  we  are  ever  going  to  really  get  any- 
where on  this  matter,  we  have  got  to  do  it  in  a larger  way  than  we 
have  undertaken  to  do  it  so  far.  I was  looking  at  a chart  last  night — 


248 


MEAT  PACKER. 


this  is  not  germane  to  this  matter  at  all — showing  a study  of  prices 
of  the  four  great  starch-producing  crops  in  their  relation  to  wars, 
covering  a period  of  200  years.  It  was  a very  illuminating  chart, 
showing  the  effects  of  prices  on  the  four  great  starch  producing  foods, 
and  also  the  effect  of  the  pressure  of  population  on  the  production 
of  farm  products  and  on  wars. 

It  seems  to  me  that  the  Government  should  provide  means  and 
agencies  for  making  thorough  studies  of  all  of  these  great  movements, 
not  only  in  relation  to  the  manufacture  and  distribution  of  meats, 
but  of  a great  many  other  things  that  affect  our  national  life.  That 
is  more  important  now  than  ever  before  in  our  history,  and  this 
effort  you  have  made  in  the  grain  future  trading  act  and  this  effort 
you  are  making  here  to  bring  the  packing  and  distribution  of  meats 
under  supervision,  are  very,  very  necessary  in  my  opinion,  because 
we  are  undergoing  profound  changes  now  that  are  going  to  affect 
our  national  life  for  a century  to  come,  and  we  are  not  making  the 
thorough  studies  of  those  changes  that  it  is  necessary  we  should  make 
for  the  benefit  of  our  people. 

The  Chairman.  Mr.  Secretary,  one  suggestion  is  that  a live-stock 
commission  be  created  or  a commission  placed  in  the  Department  of 
Agriculture  under  the  Secretary.  Have  you  any  suggestion  as  to 
that  ? 

Secretary  Wallace.  I have  not  seen  anything  on  that,  so  I am  not 
competent  to  express  an  opinion.  If  you  do  something  of  that  sort 
I hope  you  will  not  set  up  a sort  of  independent  commission  within 
the  department  purely  because  of  the  administrative  difficulties 
involved . 

The  Chairman.  The  thought  was  to  create  a commission  and  put 
it  under  the  department. 

Secretary  Wallace.  Of  course,  if  you  should  make  the  depart- 
ment the  supervisory  agency,  we  will  have  to  set  up  an  organization 
within  the  department  to  do  the  work. 

The  Chairman.  And  the  Secretary  of  Agriculture  should  be  held 
responsible. 

Secretary  Wallace.  Yes. 

The  Chairman.  And  the  Secretary  is  responsible  to  the  President. 

Secretary  Wallace.  Yes. 

The  Chairman.  And  we  do  not  want  any  division  of  responsibility. 

Secretary  Wallace.  That  would  add  to  our  administrative  diffi- 
culties and  I hope  that  will  not  be  done,  although,  as  I say,  I am  not 
talking  about  what  may  have  been  done  here,  because  I do  not  know 
what  has  been  done  in  reference  to  that.  I am  just  speaking  of  the 
general  principle  that  the  more  we  can  fix  authority  the  better  we 
can  administer  this  or  any  other  law. 

Mr.  Tincher.  Mr.  Secretary,  it  has  been  suggested  that  the  bills 
all  contemplate  the  regulation  of  the  commission  man,  who,  to  some 
extent  at  least,  is  or  should  be  the  agent  of  the  producer,  and  I have 
been  asked  to  ask  you  the  question  whether  you  thought  the  regu- 
lation should  apply  to  him  as  well  as  to  the  stockyards. 

Secretary  Wallace.  I do,  absolutely;  yes,  sir. 

Mr.  Tincher.  If  his  business  is  perfectly  legitimate  and  proper  and 
if  the  regulations  are  legitimate  and  proper,  then  this  regulation 
would  not  hurt  him  in  any  way. 


MEAT  PACKER. 


249 


Secretary  Wallace.  I think  you  should  give  supervisory  power 
over  all  the  agencies  which  come  in  contact  with  this  business. 

Mr.  Clarke.  In  other  words,  looking  at  the  great  big  business  as 
an  entity. 

Secretary  Wallace.  Yes;  it  is  an  entity,  and  a business  that  is 
very  necessary  to  us,  and  we  should  try  to  see  that  it  is  administered 
efficiently  and  economically,  and  on  a basis  that  will  give  the  pro- 
ducer a price  that  will  enable  him  to  maintain  production,  and  at  the 
same  time  give  the  consumer  his  meat  at  the  lowest  price  consistent 
with  a price  that  will  maintain  production,  and  we  have  got  to  have 
in  mind  the  interests  of  both,  as  well  as  deal  justly  with  all  those 
who  function  between  producer  and  consumer. 

Mr.  Gernerd.  There  must  be  an  equal  balance. 

Secretary  Wallace.  There  must  be;  yes,  sir. 

Mr.  Kincheloe.  Mr.  Secretary,  are  there  any  provisions  in  any  one 
of  these  three  bills  that  you  think  are  too  radical  or  that  should  not 
be  in  there  ? 

Secretary  Wallace.  I have  not  been  able  to  give  a close  enough 
study  to  the  bills  to  enable  me  to  answer  that  question,  but  I expressed 
the  hope  that  we  might  have  an  opportunity  to  study  the  bill  you 
finally  decide  is  a proper  bill.  I would  like  to  have  time  to  do  that, 
not  that  we  want  to  interfere  with  your  operations,  gentlemen,  but 
if  you  lodge  supervisory  power  with  us  we  would  like  to  cooperate 
with  you. 

Mr.  Gernerd.  And  we  want  to  cooperate  with  you. 

Secretary  Wallace.  Mr.  Chairman,  I believe  that  is  all  I have  to 
say. 

The  Chairman.  We  are  very  grateful  to  you,  Mr.  Secretary,  for 
appearing  before  us. 

Secretary  Wallace.  I thank  you. 

The  Chairman.  Who  is  your  next  witness  ? 

Mr.  Creigh.  Mr.  Chairman,  I understand  Mr.  Veeder  has  been 
called  away.  There  are  a number  of  these  packer  witnesses  here. 
Gen.  Ryan,  of  Cincinnati,  I believe,  is  the  next  one  on  our  list. 

The  Chairman.  You  are  in  control  of  the  time,  and  we  will  be 
pleased  to  hear  from  him. 

STATEMENT  OF  ME.  MICHAEL  EYAN,  OF  CINCINNATI,  OHIO. 

Mr.  Ryan.  I believe  I am  familiar  to  your  worthy  chairman,  Mr. 
Haugen.  The  courtesy  he  showed  me  a year  ago  when  appearing 
before  a similar  body  is  a pleasant  memory,  and  I have  thought  of 
you  ever  since,  Mr.  Haugen,  and  I was  very  glad  to  read  in  the  papers 
that  you  were  reelected  to  come  back  again.  I just  thought  then 
that  the  Democratic  voters  in  your  constituency  must  have  mistaken 
the  name  of  Haugen  for  Hogan  [laughter],  and  whether  Republican 
or  Democrat,  they  voted  for  their  countryman. 

Now,  sir,  I represent  the  packers  of  old  Cincinnati.  Cincinnati  is 
proud  of  being  the  birthplace  of  the  packing  industry.  It  was  a long 
time  ago,  and  some  of  her  lusty  western  cities  have  taken  the  advance 
largely  in  that  industry,  but  we  are  still  down  there  doing  business 
at  the  old  stand,  and  I come  representing  the  packing  interests  of  the 
city  of  Cincinnati  and  southern  Ohio,  and  part  of  the  State  of  Ken- 


250 


MEAT  PACKER. 


tucky,  to  protest  against  what  is  called  antipacker  legislation.  I do 
not  know  whether  it  is  meant  that  way  or  not. 

There  is  scarcely  a newspaper  you  take  up  that  is  not  headed  by 
antipacker  legislation.  I do  not  think  that  it  is  the  intent  or  purpose 
of  Congress  to  antagonize  the  packers  in  any  way,  and  I do  not  know 
that  the  packers  are  guilty  of  flagrant  violations  of  law  so  as  to  justify 
harsh  and  drastic  measures  being  enacted  against  them. 

Some  abuses  may  creep  into  our  business  as  in  many  other  lines  of 
business,  but  we  have  laws  sufficient,  Federal  and  State  laws,  to 
punish  the  offenders,  and  why  should  the  packers  be  singled  out  from 
the  other  industries  of  the  country  to  be  put  under  Federal  control 
and  according  to  the  scope  and  substance  of  the  bills  now  before  you, 
that  is  nearly  akin  to  martial  law. 

Gentlemen,  I have  the  old  fashioned  notion  that  legislative  func- 
tions should  be  extended  to  private  industries  as  little  as  possible. 
I believe  they  will  work  no  good  to  the  public  or  to  the  industry  and 
will  result  in  failure. 

There  is  such  a thing  as  legislating  a business  to  death,  and  that 
seems  to  me  to  be  the  case  with  the  packers,  and  if  this  constant 
legislation  and  agitation  keeps  on,  I am  not  a prophet  of  evil,  but  I 
will  say  that  in  five  years  time  that  great  packing  industry  will  be 
wrecked. 

This  is  not  an  opportune  time,  gentlemen,  for  introducing  experi- 
mental legislation.  The  whole  world  is  in  a state  of  paralyzation. 
Industry  is  very  much  depressed.  I have  been  in  the  packing  busi- 
ness all  my  lifetime.  I have  gone  through  hard  times  and  panic, 
but  I have  never  experienced  anything  like  this  before.  I can  only 
look  at  it  as  a great  commercial  earthquake  that  has  spread  all  over 
the  civilized  world  and  has  shaken  the  basis  of  every  industry,  and  I 
want  to  tell  you,  although  I guess  you  know  it,  the  packers  have  not 
escaped  it.  They  have  been  hit  very  hard  within  the  last  six  or 
eight  months,  and  their  affiliated  industries  have  suffered  very,  very 
severely.  The  war  profits,  in  many  instances,  have  all  disappeared, 
and  more  with  them,  but  nevertheless,  as  Americans,  we  determined 
to  take  our  medicine,  grit  our  teeth,  go  right  to  work  again  and  by 
new  vigor  and  energy  endeavor  to  recoup  our  losses. 

But,  gentlemen,  I want  to  say  to  you  that  instead  of  being  discour- 
aged we  want  to  be  encouraged  by  our  lawmakers.  We  want  to 
have  a free  hand  in  our  business,  and  as  some  of  these  bills  propose, 
not  all  of  them,  but  some  of  them,  if  they  are  enacted  into  law,  we  are 
fettered  hand  and  foot  in  such  a manner  that  we  can  not  conduct  our 
business. 

If  you  gentlemen  had  practical  experience  of  the  vicissitudes  and 
the  uncertainties  of  the  packing  business,  you  would  not  consider 
putting  these  restrictions  upon  them.  It  would  be  very  discour- 
aging, under  some  of  these  bills  that  are  before  you,  if  we  have  at  our 
shoulders  all  the  time  detectives,  spies,  petty  tyrants,  when  on  the 
most  trivial  violation  of  any  of  the  technical  laws,  we  are  hauled 
before  the  courts  and  placed  in  litigation  involving  lawyers’  fees, 
endless  injunctions,  etc. 

If  you  want  to  do  us  a great  favor,  if  you  want  to  help  us  along, 
gentlemen,  keep  your  hands  off  the  packing  industry,  for  the  time 
being,  at  least,  and  let  us  work  out  our  own  destiny  the  best  we  can. 


MEAT  PACKER. 


251 


With  these  few  preliminary  remarks,  gentlemen,  I will  be  very 
glad  if  any  of  you  would  ask  me  any  questions  that  may  occur  to  you. 

Mr.  Jones.  Mr.  Ryan,  most  of  this  legislation  you  speak  about, 
the  actual  legislation,  has  been  confined  to  the  newspaper  headlines 
you  spoke  of.  There  has  been  no  actual  legislation  regulating  the 
packers. 

Mr.  Ryan.  I have  looked  over  the  bills  and  it  seems  to  me  that  in 
some  of  these  bills  the  control  of  the  business  is  taken  entirely  away 
from  the  packers. 

Mr.  Gernerd.  Take,  for  instance,  the  Haugen  bill,  how  does  that 
take  away  your  freedom  of  action  ? 

Mr.  Ryan.  If  any  of  the  bills  have  mitigation  about  them,  it  is  the 
Haugen  bill,  but  there  is  also  pending  the  Norris  hill  and  the  Anderson 
bill.  The  Norris  bill  appoints  a commission.  That  commission  is  to 
be  composed  of  three  gentlemen  paid  $10,000  a year,  with  secretaries, 
attorneys,  and  officials,  and  under  such  a measure  they  will  want  a 
number  of  officials  in  every  establishment  in  the  United  States  in 
order  to  enforce  the  law. 

Mr.  Gernerd.  You  heard  Secretary  Wallace  give  his  views  about 
this  matter?  There  was  not  anything  extremely  radical  about  his 
view  of  the  matter. 

Mr.  Ryan.  Wliat  I heard  from  Mr.  Wallace  was  simply  referring 
to  the  stockyards  and  the  live-stock  industry.  I have  not  got  any 
interest,  nor  have  the  packers  of  Cincinnati  any  interest,  in  stock- 
yards. 

Mr.  Gernerd.  I appreciate  that,  but  it  is  all  interallied. 

Mr.  Ryan.  Yes;  there  is  a relationship. 

Mr.  Gernerd.  You  have  read  the  Haugen  bill  ? 

Mr.  Ryan.  Yes,  sir. 

Mr.  Gernerd.  With  all  your  experience,  Mr.  Ryan,  would  you  say 
there  was  anything  radical  about  that  bill  or  anything  drastic,  or 
anything  that  would  in  any  way  interfere  with  the  operation  of  your 
business  ? 

Mr.  Ryan.  The  bill  puts  the  supervision  of  the  packing  industry 
under  the  Secretary  of  Agriculture,  does  it  not  ? 

Mr.  Gernerd.  Only  from  the  standpoint  of  obtaining  information 
for  the  benefit  of  the  Nation  at  large. 

Mr.  Ryan.  The  Secretary  of  Agriculture  is  at  the  head  of  the  inspec- 
tion bureau  at  the  present  time. 

Mr.  Gernerd.  Yes,  sir. 

Mr.  Ryan.  And  he  has  access  to  all  the  packing  houses  in  the 
United  States  at  the  present  time  through  those  inspectors. 

Mr.  Gernerd.  All  right;  but  he  has  not  any  authority  beyond  that. 

Mr.  Ryan.  If  there  is  a violation  of  law  in  any  one  of  the  packing 
houses,  I do  not  see  why  the  Government  inspector  is  not  there  to  re- 
port it. 

Mr.  Tincher.  As  I understand  you,  you  are  willing  that  the 
packers  should  be  governed  by  the  law  of  the  land,  the  same  as  other 
people. 

Mr.  Ryan.  Yes,  sir. 

Mr.  Tincher.  You  have,  as  you  call  it,  an  old-fashioned  idea  that 
the  law  should  not  interfere  with  a man’s  personal  liberties  any  more 
than  is  absolutely  necessary. 

Mr.  Ryan.  That  is  right. 


252 


MEAT  PACKER. 


Mr.  Tincher.  That  is  right;  is  it? 

Mr.  Ryan.  Yes,  sir. 

Mr.  Tincher.  It  has  been  necessary,  however,  in  the  interest  of 
good  government,  to  have  a laiv  to  interfere  with  the  personal  rights 
of  man. 

Mr.  Ryan.  Where  he  is  a wrongdoer  or  disobeys  the  law;  yes,  sir. 

Mr.  Tincher.  If  the  evidence  discloses  that  the  packing  business 
is  carried  on  in  such  a way  and  to  such  an  extent  that  there  ought  to 
be  some  law,  you  think  the  Secretary  of  Agriculture,  as  I understand 
it,  would  be  the  place  to  put  the  jurisdiction  ? 

Mr.  Ryan.  A special  law  governing  that? 

Mr.  Tincher.  It  would  not  be  special;  it  would  be  general,  because 
it  would  apply  to  the  trade  and  to  the  business.  We  have  special 
laws,  as  you  would  term  them.  For  instance,  were  you  in  the  packing 
business  before  the  Interstate  Commerce  Commission  was  created  ? 

Mr.  Ryan.  Yes,  sir. 

Mr.  Tincher.  Did  you  get  your  rebates  from  the  railroads  in  those 

days  ? 

Mr.  Ryan.  No,  sir  ; we  never  got  any  rebates. 

Mr.  Tincher.  There  was  a gentleman  who  testified  here  yester- 
day who  got  rebates. 

Mr.  Ryan.  We  never  asked  for  any  rebates. 

Mr.  Tincher.  Was  it  not  a proper  step  to  take  when  we  passed  a 
law  that  prevented  the  granting  of  rebates? 

Mr.  Ryan.  Yes,  sir. 

Mr.  Tincher.  The  railroads  were  owned  by  individuals  just  like 
you  own  your  packing  company. 

Mr.  Ryan.  I did  not  understand  your  question.  Did  you  say  it 
was  a proper  step  to  grant  the  rebates  ? 

Mr.  Tincher.  No;  to  prevent  them. 

Mr.  Ryan.  To  prevent  the  rebates;  yes,  sir. 

Mr.  Tincher.  You  thoroughly  approve  of  that  move  on  the  part 
of  your  Government  ? 

Mr.  Ryan.  Yes,  sir. 

Mr.  Tincher.  And  that  operated  to  the  good  of  the  whole  people, 
you  think? 

Mr.  Ryan.  Yes,  sir. 

Mr.  Tincher.  Now,  if  there  are  other  practices  in  vogue  which  are 
considered  all  right  by  the  packers  but  are  just  as  detrimental  to  the 
whole  people  of  this  country  as  the  rebating  system  was,  do  you  not 
think  they  ought  to  be  cured  in  some  way  ? 

Mr.  Ryan.  I do  not  think  the  packing  industry  and  the  railroads 
are  analogous. 

Mr.  Tincher.  One  of  them  was  engaged  in  the  transportation  of 
the  necessaries  of  life  and  the  other  is  engaged  in  the  distribution  of 
the  necessaries  of  life.  The  common  carriers  of  the  country  were 
engaged  in  the  transportation  of  the  necessaries  of  life  practically  to 
the  exclusion  of  everyone  else,  and  the  packers  are  engaged  in  the 
distribution  of  the  necessaries  of  life  to  the  extent,  at  any  rate,  of 
being  able  to  control  the  market.  Do  you  not  now  see  some  analogy 
between  them,  and  if  there  is  any  favor  on  either  side  of  the  matter, 
is  not  the  packer  the  more  important  of  the  two  functions  ? 

Mr.  Ryan.  One  is  a great  public  utility  owned  by  hundreds  of 
thousands  of  stockholders  and  the  other  is  a private  business. 


MEAT  PACKER. 


253 


Mr.  Tincher.  This  eating  proposition  is  private,  of  course;  but  it 
is  more  or  less  of  a public  proposition,  because  we  all  indulge  in  it. 
The  whole  public  has  to  indulge  in  the  proposition  of  eating,  and  you 
are  dealing  with  one  of  the  necessaries  of  life.  You  consider  it 
absolutely  necessary  in  order  for  this  Government  to  exist  that  the 
production  of  food  products,  such  as  meats,  should  continue  ? 

Mr.  Ryan.  Yes,  sir;  that  is  all  right. 

Mr.  Tincher.  Under  existing  conditions  and  for  a number  of 
years  there  has  been  a tendency,  except  during  the  stimulation  for 
a short  period  during  the  war  on  account  of  the  war,  to  absolutely 
discourage  and  destroy  the  production  of  meats  in  this  country,  and 
there  can  not  be  any  future  production  of  meat  products  under 
present  existing  conditions. 

Mr.  Ryan.  I did  not  know  that.  That  is  new  to  me. 

Mr.  Tincher.  Do  you  not  know  that  the  meat  producers  of  this 
country  are  either  in  bankruptcy  or  on  the  verge  of  bankruptcy  and 
are  producing  at  an  absolute  loss  to-day  ? 

Mr.  Ryan.  That  is  occasioned  by  an  unfortunate  combination  of 
circumstances  that  nobody  could  prevent. 

Mr.  Tincher.  Do  you  think  they  will  go  on  at  that  rate? 

Mr.  Ryan.  No,  sir. 

Mr.  Tincher.  Do  you  think  they  can  go  on  under  those  conditions? 

Mr.  Ryan.  No,  sir;  things  will  recover  all  right. 

Mr.  Tincher.  Now,  to  whom  can  they  look,  if  they  can  not  look 
to  their  own  Government  ? 

Mr.  Ryan.  The  natural  laws  that  govern  trade  and  commerce,  the 
law  of  supply  and  demand. 

Mr.  Tincher.  When  the  natural  laws  of  trade  and  commerce  are 
absolutely  put  aside,  and  five  organizations  in  the  United  States 
have  the  ability  and  the  organization  to  manipulate  them,  do  you 
not  think  it  is  time  then  for  the  Government  to  step  in. 

Mr.  Ryan.  If  they  do  that  to  the  injury  of  the  public  and  it  is 
proven  that  they  do  it  to  the  injury  of  the  public,  the  Government 
has  got  a right  to  prevent  them,  because  that  is  wrongdoing. 

Mr.  Tincher.  The  only  proof  we  have  is  the  testimony  of  wit- 
nesses who  come  before  this  committee  and  a conclusive  finding  of 
one  of  the  arms  of  the  Government,  which  had  a heavy  appropri- 
ation for  the  making  of  the  investigation,  that  that  is  true.  Do  you 
think  the  American  Congress  can  afford  simply  to  ignore  that  propo- 
sition ? 

Mr.  Ryan.  Has  not  the  American  Congress  passed  the  Sherman 
antitrust  law  and  is  not  that  sufficient  to  reach  out  its  arms  and 
correct  these  evils  without  any  new  laws  ? 

Mr.  Tincher.  No  one  ever  went  to  jail  under  the  Sherman  anti- 
trust law. 

Mr.  Ryan.  I do  not  think  they  will  go  to  jail  under  any  of  the  laws 
that  you  pass. 

Mr.  Tincher.  I hope  not.  I hope  they  will  comply  with  the  laws 
that  Congress  will  pass. 

Mr.  Ryan.  Then  they  ought  to  comply  with  the  common  law  of 
the  land. 

Mr.  Tincher.  You  would  not  be  in  favor  of  this  Government  rely- 
ing entirely  upon  the  common  law  of  the  land  in  all  such  matters. 


254 


MEAT  PACKER. 


Mr.  Ryan.  I think  we  have  ample  and  sufficient  laws  to  cover  every- 
thing without  passing  any  more  legislation. 

Mr.  Tincher.  What  law  do  you  think  we  have  that  could  be  suc- 
cessfully enforced  that  would  prohibit  the  five  big  packers  from 
agreeing  every  day  what  they  will  pay,  what  price  they  will  fix,  and 
what  price  the  farmer  or  the  producer  shall  receive  for  his  products  ? 

Mr.  Ryan.  I consider  that  is  a combination  in  restraint  of  trade 
which  the  Sherman  Act  forbids.  Many  of  the  States  of  the  Union 
have  antitrust  laws.  I know  that  the  State  of  Ohio  has  what  is 
known  as  the  Valentine  law,  that  is  very  drastic. 

Mr.  Tincher.  I have  observed  that  the  packing  industry,  in  par- 
ticular, is  very  fond  of  the  antitrust  laws.  Can  you  explain  that  ? 

Mr.  Ryan.  They  are  very  fond  of  the  antitrust  laws  ? 

Mr.  Tincher.  Yes,  sir;  they  always  are  going  to  the  antitrust  laws. 

Mr.  Ryan.  No  more  than  any  good  citizen  who  wants  to  uphold 
the  law. 

Mr.  Tincher.  Every  time  they  have  been  prosecuted  under  any 
of  these  laws  they  have  been  quite  successful.  They  do  not  seem  to 
understand  the  situation,  because  if  they  did  there  would  probably 
not  be  the  complaints  about  findings  by  Government  agencies.  Do 
you  not  think  that  it  is  possible  to  pass  a constructive  law  that  will 
not  put  the  packers  out  of  business  and  will  have  the  power  to  stabilize 
the  proposition  ? 

Mr.  Ryan.  I do  not  think  this  is  an  opportune  time  for  such 
legislation. 

Mr.  Tincher.  Why  is  it  not  an  opportune  time  ? Was  there  ever 
a time  when  the  consumer  was  paying  more  in  accordance  with  what 
the  producer  received  for  his  products  than  to-day  ? 

Mr.  Ryan.  As  far  as  the  wholesalers  are  concerned,  I know  that 
the  margin  of  profit  that  we  derive  from  our  line  of  business,  selling 
cattle  and  hogs  and  produce,  there  is  not  very  much  profit  to  us. 

Mr.  Tincher.  But  was  there  ever  a time  in  the  history  of  this 
country,  in  your  recollection,  when  the  actual  consumer  of  meat 
was  paying  more  in  accordance  with  what  the  producer  of  meat  was 
receiving  than  to-day  ? 

Mr.  Ryan.  Yes,  sir.  There  were  times — I can  not  recollect — after 
the  Civil  War  and  during  the  Civil  War  when  things  of  that  kind 
took  place. 

Mr.  Tincher.  You  say  that  you  “can  not  recollect”?  I want  to 
make  a statement  that  there  never  has  been  such  a spread  between 
the  price  that  the  consumer  actually  pays  and  the  producer  actually 
receives  as  to-day.  Maybe  there  was  some  time,  and  you  can  put 
that  in  the  record ; I invite  you  to  do  so,  if  there  was  a time  when  that 
condition  existed.  With  every  line  of  business  depressed,  was  there 
ever  a more  opportune  time  for  the  American  Congress  to  try  to 
function  than  to-day? 

Mr.  Ryan.  Are  you  passing  any  law  for  the  regulation  of  the 
retailers  ? 

Mr.  Tincher.  I contend  that  a constructive  law  should  be  passed 
by  this  Congress  which  regulates  the  trade  or  puts  it  under  the 
jurisdiction  or  supervision  of  some  legitimate  arm  of  the  Govern- 
ment and  which  will  bring  the  producer  and  consumer  together  and 
be  beneficial  to  both.  For  instance,  you  are  not  afraid  of  being 
arrested  in  Washington? 


MEAT  PACKER. 


255 


Mr.  Ryan.  It  is  a very  disagreeable  thing  to  be  arrested. 

Mr.  Tincher.  But  you  are  not  afraid? 

Mr.  Ryan.  Not  very  much. 

Mr.  Tincher.  Hedged  in  with  policemen.  If  you  violate  any 
law,  if  you  do  wrong,  you  will  be  arrested,  but  you  are  not  going  to  be 
arrested  because  you  are  not  violating  any  law  ? 

Mr.  Ryan.  Perhaps,  we  will  be  in  a position  under  this  Govern- 
ment control  where  we  will  not  know  if  we  do  violate  the  law  and 
then  we  will  be  arrested. 

Mr.  Tincher.  This  Congress  will  not  pass  any  law  which  would 
permit  that. 

Mr.  Ryan.  Let  me  say  one  thing  in  answer  to  your  question.  If 
we  can  put  before  you  our  test  sheets  and  prove  that  our  profits  are 
very  slight,  considering  the  capital  invested,  you  would  not  dis- 
courage our  profits  ? 

Mr.  Tincher.  No;  I want  you  to  have  a profit. 

Mr.  Ryan.  You  speak  about  the  great  differential  between  the 
cost  of  meats  and  the  cost  of  live  stock,  now  the  packer  can  show  a 
clean  hand 

Mr.  Tincher  (interposing).  You  spoke  a while  ago  of  the  fact  that 
the  packers  not  only  lost  money,  but  some  of  their  subsidiary  com- 
panies had.  Is  it  not  a fact  that  the  packers  have  so  many  different 
companies  all  the  way  down  the  line  that  it  is  very  hard  to  find  out 
just  where  it  is?  Is  not  that  another  reason  why  the  Government 
should  step  in  here,  when  this  important  proposition  is  the  same  as 
years  ago,  and  pass  some  legislation  ? 

Mr.  Ryan.  I do  not  know  that  the  packers  were  going  outside  of 
their  legal  rights. 

Mr.  Tincher.  They  were  not  going  outside  of  their  legal  rights 
when  they  were  taking  rebates  from  the  railroads  ? That  was  legal, 
but  now  nobody  would  defend  making  that  legal  to-day  and  no 
packer  would  advocate  a law  that  would  do  away  with  it  ? 

Mr.  Ryan.  I think  it  was  not  honest. 

Mr.  Tincher.  No;  it  was  not.  Ten  years  from  now  if  a good  law 
is  passed  you  will  be  one  of  the  first  fellows  to  say  that  it  was  right. 

Mr.  Ryan.  I do  not  know  that  I will  live  10  years. 

Mr.  Tincher.  Oh,  yes,  you  will. 

Mr.  Ryan.  I have  had  experience  enough  in  the  last  30  or  40 
years  to  know  that  legislation  always  interferes  with  business. 

Mr.  Tincher.  You  did  not  even  know  that  the  big  packers  were 
getting  rebates  at  the  time  you  were  sitting  down  in  Cincinnati? 

Mr.  Ryan.  I heard  rumors  of  it  but  did  not  know  the  actual  facts. 

Mr.  Tincher.  With  all  of  your  keen  ability  as  a business  man 
you  did  not  come  to  Congress  and  advocate  a law  which  would  do 
away  with  the  rebates  ? 

Mr.  Ryan.  No,  sir. 

Mr.  Tincher.  You  are  not  here  now  asking  Congress  to  pass  a 
law  to  do  away  with  the  evils  in  the  business? 

Mr.  Ryan.  If  the  evil  abuses  can  be  proved. 

Mr.  Tincher.  That  depends  on  what  you  would  call  evil  abuses. 

Mr.  Ryan.  All  right. 

Mr.  Tincher.  Have  you  read  the  report  of  the  Federal  Trade 
Commission,  five  volumes  on  this  subject? 


256 


MEAT  PACKER. 


Mr.  Ryan.  No.  The  Federal  Trade  Commission  has  been  very 
voluminous  and  very  illegal  with  regard  to  the  packers;  I know  that. 

Mr.  Tincher.  But  you  have  not  read  the  reports? 

Mr.  Ryan.  I have  read  a great  many  excerpts  from  the  reports. 

Mr.  Tincher.  How  many  packing  houses  are  there  in  Cincinnati? 

Mr.  Ryan.  Ten. 

Mr.  Tincher.  Have  you  an  agreement  among  yourselves  as  to 
how  you  will  divide  the  business  down  there  ? 

Mr.  Ryan.  No;  not  in  the  least. 

Mr.  Tincher.  If  you  did  have  an  agreement  would  it  be  fair  to 
the  people  ? 

Mr.  Ryan.  No,  sir. 

Mr.  Tincher.  It  has  been  disclosed  by  the  testimony  that  at 
Denver  they  had  an  absolute  agreement  as  to  how  they  would 
divide  the  business  ? 

Mr.  Ryan.  I will  say  that  the  State  of  Colorado  should  take 
hold  of  that. 

Mr.  Tincher.  You  would  shift  it  back  to  the  State? 

Mr.  Ryan.  Yes,  sir. 

Mr.  Tincher.  Suppose  the  State  could  not,  suppose  that  the 
packers  met  and  made  this  agreement  in  Chicago,  how  could  the 
State  of  Colorado  reach  them? 

Mr.  Ryan.  Mr.  Ryan.  They  could  not  do  it  in  practice  in 
Colorado. 

Mr.  Tincher.  They  did. 

Mr.  Ryan.  Not  if  the  State  would  prevent  it. 

Mr.  Jones.  But  the  parties  responsible  living  in  Chicago,  the 
State  of  Colorado  could  not  reach  them. 

Mr.  Tincher.  As  a matter  of  fact,  if  we  believe  it  is  necessary 
to  have  a national  law,  should  we  pass  it? 

Mr.  Ryan.  I think  we  have  enough  laws. 

Mr.  Tincher.  I am  asking  you  now  if  that  condition  exists? 

Mr.  Ryan.  Turn  it  over  to  Colorado  or  anybody  else. 

Mr.  Tincher.  Suppose  a packer  bids  on  a load  of  steers  that  is 
shipped  to  Kansas  City.  The  man  does  not  think  that  the  market 
is  satisfactory  and  he  forwards  those  steers  to  Chicago.  Suppose  they 
have  an  agreement  among  themselves  that  they  will  wire  Chicago  to 
bid  so  much  for  his  head  of  steers,  do  not  pay  him  any  more,  and 
when  he  gets  to  Chicago  they  just  take  off  a few  cents  a pound;  sup- 
pose that  condition  actually  existed,  should  there  not  be  a law  to 
correct  it  ? 

Mr.  Ryan.  I do  not  know  whether  it  exists,  personally;  I have  no 
knowledge. 

Mr.  Tincher.  Assuming  that  it  does  exist,  will  you  not  say  that 
there  should  be  a law  ? 

Mr.  Ryan.  I do  not  think  that  it  exists. 

Mr.  Tincher.  You  will  not  even  assume  that  it  does  exist.  Have 
you  read  the  report  of  the  Federal  Trade  Commission? 

Mr.  Ryan.  No;  I do  not  want  to  read  any  more  of  the  Federal 
Trade  Commission  literature. 

Mr.  Tincher.  Have  you  ever  read  what  Mr.  Yeeder  said  to  this 
committee  as  to  the  five  big  packers’  pool  ? 

Mr.  Ryan.  I know  from  my  own  experience.  I buy  cattle  in  Chi- 
cago. I bought  17  loads  in  St.  Louis  yesterday.  We  come  into 


MEAT  PACKER. 


257 


competition  in  all  fields  with  the  big  packers.  I never  saw  or  heard 
of  any  such  practices  except  in  the  reports  of  the  Federal  Trade 
Commission. 

Mr.  Purnell.  Mr.  Tincher  asked  you  whether  you  would  favor 
some  legislation,  provided  it  was  generally  agreed  to  exist  by  every- 
body ? 

Mr.  Ryan.  I do  not  think  you  need  any  legislation. 

Mr.  Purnell.  You  are  too  smart  a man  not  to  answer  a plain 
question. 

Mr.  Ryan.  No;  I am  just  here  in  the  interest  of  the  packers. 

Mr.  Purnell.  I suspected  that  possibly  might  be  so. 

Mr.  Ryan.  I am  here  in  the  interest  of  the  packers,  I repeat;  the 
smaller  packers.  I am  here  to  speak  for  them. 

Mr.  Tincher.  Do  the  small  packers  make  sufficient  competition 
for  the  larger  packers  ? 

Mr.  Ryan.  Sure;  yes,  sir.  I want  to  answer  your  question.  I do 
not  think  that  you  could  get  a regulation  or  a law,  no  matter  how  far 
reaching  it  be,  which  will  stop  the  market  fluctuations,  to  a certain 
extent,  in  live  stock. 

Mr.  Tincher.  Going  back  to  this  packer  proposition,  suppose  that 
Mr.  Veeder,  who  is  the  attorney  for  Swift  & Co.,  and  one  of  the 
brightest  minds  in  America,  should  stand  before  this  committee  and 
say  that  “We  have  a practice  by  which  our  buyers  in  Kansas  City 
wire  Chicago  if  a man  forwards  his  produce  on,  to  give  him  the 
Kansas  City  price;  that  it  was  the  practice  of  the  packer  buyer  in 
Chicago  not  to  overbid  the  Kansas  City  bid,”  suppose  that  were 
actually  done,  would  you,  representing  the  packers,  say  to  this  com- 
mittee then  that  they  should  still  not  have  any  legislation  ? 

Mr.  Ryan.  That  may  occur  in  a few  instances,  but  not  at  all  gen- 
erally; it  is  impossible;  it  could  not  be  done. 

Mr.  Tincher.  Suppose  they  have  an  absolute  agreement  and  it 
would  occur  every  time  ? 

Mr.  Ryan.  They  would  wire  from  Omaha  to  Kansas  City  that  such 
a number  of  cattle  was  going  there;  that  may  have  been  done.  If  I 
had  to  buy  in  Kansas  City  I could  buy  those  cattle  right  there;  take 
the  cattle  out  of  his  hands. 

Mr.  Tincher.  They  handle  84  per  cent  of  the  product. 

Mr.  Ryan.  How  much  did  you  say  the  big  packers  handled  ? 

Mr.  Tincher.  Eighty-four  per  cent. 

Mr.  Kincheloe.  Of  all  the  business  that  enters  into  interstate 
commerce. 

Mr.  Ryan.  It  might  be. 

Mr.  Tincher.  That  is,  the  five  big  packers — not  you. 

Mr.  Ryan.  Let  me  get  straight  on  this.  Do  you  mean  to  say  that 
the  five  big  packers  handle  84  per  cent  of  the  packing  business  in  this 
country  ? 

Mr.  Tincher.  That  is  in  commerce. 

Mr.  Kincheloe.  In  interstate  commerce. 

Mr.  Tincher.  You  did  not  know  that? 

Mr.  Ryan.  No;  I do  not  know  it  now. 

Mr.  Tincher.  Suppose  they  admitted  it,  would  you  believe  it? 

Mr.  Ryan.  I would  want  to  see  that. 

Mr.  Tincher.  Suppose  they  actually  admitted  it,  would  you 
believe  it  then? 


46985—21 17 


258 


MEAT  PACKER. 


Mr.  Ryan.  Yes,  sir;  if  they  pleaded  guilty  to  things  of  that  sort. 

Mr.  Tincher.  Suppose  they  admitted  further  that  with  the 
powerful  volume  of  business  that  they  had,  they  had  a practice  by 
which  every  forwarded-on  shipment  with  the  price  bid  on  that  ship- 
ment was  wired  on  for  the  purpose  of  influencing  the  buyers  of  those 
institutions  in  bidding  at  the  forwarding  market  ? 

Mr.  Ryan.  Did  Mr.  Veeder  say  that  was  the  general  practice? 

Mr.  Tincher.  I am  asking  you,  if  they  admit  that,  would  you  then 
deem  that  there  was  any  necessity  for  legislation  ? 

Mr.  Ryan.  On  any  such  proposition,  I would  say  it  is  wrong. 

Mr.  Tincher.  That  was  one  of  the  things  that  made  Congress  take 
cognizance  of  the  proposed  legislation.  The  witness  did  not  deny 
that  the  packers  wired  on. 

Mr.  Creigh.  I have  not  the  least  desire  to  break  into  your  time, 
but  I think  you  are  a little  too  far  out  of  the  line  of  the  things  which 
appear  in  the  record. 

Mr.  Tincher.  Mr.  Ryan  is  here  for  the  purpose  of  representing 
the  packers.  I was  just  trying  to  ascertain  to  what  extent  he  was 
willing  to  represent  them. 

Mr.  Creigh.  He  has  already  stated  that  he  represented  the  smaller 
packers.  You  have  said  that  Mr.  Yeeder  said  some  things  which 
I do  not  think  he  said. 

Mr.  Tincher.  Mr.  Veeder  will  be  on  the  stand,  he  has  been  on  the 
stand  many  times  before.  If  I quote  him  as  saying  anything  he 
did  not  say,  I will  correct  it  when  Mr.  Veeder  calls  my  attention  to  it. 

Did  you  know  that  the  five  big  packers  had  a corporation  among 
themselves  at  one  time,  in  which  all  of  them  owned  stock  ? 

Mr.  Ryan.  Yes,  sir. 

Mr.  Creigh.  May  I ask  what  the  name  of  the  corporation  was  ? 

Mr.  Tincher.  I suppose  the  distinguished  gentleman  representing 
Cudahy  knows  concerning  the  corporation  organization  and  it  would 
be  an  entire  waste  of  time  for  me  to  try  to  enlighten  him. 

Mr.  Creigh.  I do  know,  and  I think  the  record  will  show,  that 
Cudahy  did  not  have  a dollar’s  worth  of  interest  in  it. 

Mr.  Tincher.  Maybe  they  were  not  classed  with  the  five  big 
packers.  I accept  the  apology  of  the  gentleman  representing  Cudahy 
& Co.  in  his  disclaimer  of  any  interest  in  this  organization. 

Mr.  Lightfoot.  I think  in  the  interest  of  the  record,  Mr.  Chair- 
man, it  would  be  but  fair  to  have  another  one  eliminated  from  that 
also. 

Mr.  Tincher.  You  want  Wilson  & Co.  eliminated? 

Mr.  Lightfoot.  Yes,  sir.  You  will  remember  that  at  the  time 
when  the  National  Packing  Co.  was  organized — Wilson  & Co.  was  not 
in  existence,  it  was  then  Sulzberger — Sulzberger  had  no  interest 
whatever  in  the  National  Packing  Co.,  and  were  not  a member  of  it. 
The  record  shows  that  Swift,  Armour,  and  Morris  organized  that 
concern. 

Mr.  Tincher.  While  you  are  on  your  feet,  Judge  Lightfoot,  I 
think  you  were  prosecuting  the  packers  at  that  time  and  were  not 
working  for  them  and  did  not  know  the  inside,  but  were  not  Sulz- 
berger and  the  other  gentlemen  invited  once  in  a while  to  the  con- 
ferences of  the  three? 

Mr.  Lightfoot.  I was  not  connected  with  the  packing  company  at 
that  time  and  as  to  who  was  invited,  I do  not  know. 


MEAT  PACKER. 


259 


I want  to  say  that  no  court  in  this  country  ever  held  that  the 
organization  of  a corporation  like  the  National  Packing  Co.  was 
illegal.  The  Supreme  Court  of  the  United  States  has  held  that  the 
consolidation  of  more  companies  in  the  steel  business  than  were  rep- 
resented in  the  three  concerns  that  organized  the  National  Packing 
Co.  was  legal. 

Mr.  Tincher.  Right  there  on  that  subject.  If  the  Supreme  Court 
never  held  that  this  institution  was  illegal  it  was  because  there  was 
not  a proper  law. 

Mr.  Lightfoot.  It  would  not  be  illegal  to-day. 

Mr.  Tincher.  There  is  an  organization  now  known  as  the  Ameri- 
can Meat  Packers’  Association  and  I think  they  have  their  head- 
quarters in  this  city. 

Mr.  Lightfoot.  The  Institute  of  American  Meat  Packers. 

Mr.  Tincher.  The  Institute  of  American  Meat  Packers  ? 

Mr.  Lightfoot.  Yes,  sir. 

Mr.  Tincher.  Does  Wilson  & Co.  belong  to  that  organization? 

Mr.  Lightfoot.  Yes,  sir. 

Mr.  Tincher.  And  Swift  & Co.  ? 

Mr.  Lightfoot.  All  of  the  five  larger  packers  and  more  thaxi  200 
of  the  smaller  packers. 

Mr.  Tincher.  You  are  taking  all  the  smaller  packers  in  now? 

Mr.  Lightfoot.  No;  the  small  packers  took  the  larger  packers  in. 

Mr.  Tincher.  That  organization  is  the  legitimate  successor  of  the 
other  organization  ? 

Mr.  Lightfoot.  No.  There  was  a meat-packers’  association,  com- 
posed of  the  smaller  packers  and  they  simply  changed  the  name  and 
invited  the  larger  packers  in.  At  any  rate,  the  smaller  packers, 
more  than  200,  control  this  organization  just  like  any  other  number 
of  associations. 

Merely  in  the  interest  of  saving  time  and  because  I do  not  want  you 
to  get  a misconception  of  the  facts  as  to  the  legislation  you  are  now 
considering,  I want  to  say  that  it  has  been  assumed  that  these  pack- 
ing companies  in  the  past  have  continually  violated  the  law,  that 
they  had  a monopoly  in  one  form  or  another  and  are  to-day  in  some 
secret  or  devious  way  continuing  that  monopoly.  If  you  did  not 
have  the  background  of  these  old  charges,  you  would  not  have  any- 
thing, only  the  drawn-out  old  story,  much  of  which  has  been  aban- 
doned long  since. 

I take  the  position  that  the  National  Packing  Co.  as  attempted  to 
be  organized  at  that  time,  three  concerns  undertaking  to  consolidate 
their  business,  which  was  less  than  50  per  cent  of  the  business  done 
in  this  country  at  that  time,  was  legal  and  would  be  legal  to-day 
under  the  decision  of  the  Supreme  Court  of  the  United  States. 
Reference  has  been  made  by  members  to  the  Veeder  pool,  so  called, 
wherein  one  of  the  Congressmen  said  that  they  got  together  in  a 
room  and  divided  out  the  shipments  to  the  markets  of  the  country, 
that  that  was  evidence  of  illegal  conspiracy  and  monopoly.  It  would 
appear  from  the  mere  statement  of  the  fact  that  there  might  be  some 
force  in  it,  but  I want  to  call  your  attention  to  the  fact  that  the 
Supreme  Court  of  the  United  States  in  the  Grosscup  injunction  ren- 
dered against  the  packers  at  that  time,  expressly  held  that  the 
packers  could  agree  to  divide  the  shipments  to  the  different  markets 
of  this  country  for  the  purpose  of  preventing  gluts,  and  the  producers- 


260 


MEAT  PACKER. 


of  the  country  are  doing  that  in  California  to-day.  You  have  before 
you,  I do  not  know  whether  this  committee  reported  the  bill  out  or 
not,  the  Capper-Yolstead  Act,  which  provides  and  expressly  author- 
izes the  producers  of  perishable  products  to  form  an  organization  for 
the  control  of  shipments  into  the  markets  of  the  country  for  the  pur- 
pose of  preventing  waste  and  gluts.  The  packers  could,  under  the 
Grosscup  injunction,  as  decided  by  the  Supreme  Court  of  the  United 
States,  do  that,  and  the  Attorney  General  of  the  United  States  in 
the  consent  decree  expressly  took  cognizance  of  that  and  placed  a 
reference  to  it  in  the  decree : 

“Be  it  provided  that  nothing  in  this  decree  shall  modify  or  affect 
the  Grosscup  injunction  issued  in  1893,”  or  words  to  that  effect, 
about  which  so  much  has  been  said. 

If  the  producers  of  vegetables  and  of  fruits  can  combine  and 
organize  an  association,  and  I think  that  is  one  thing  that  should  be 
done  because  of  the  fact  that  a great  deal  of  the  high  cost  of  the 
necessaries  of  life  is  due  to  inefficient  and  uneconomical  distribution 
of  those  things,  so,  if  we  are  shipping  too  much  meat,  more  than  they 
can  consume  in  the  locality,  we  can  legally  now,  under  the  decision 
of  the  Supreme  Court  of  the  United  States,  go  into  a room,  just  as 
the  Veeder  pool  did,  to  meet  that  situation,  but  we  do  not  do  it. 
Why?  The  moment  we  did  some  one  would  say  that  we  were  not 
doing  it  to  prevent  waste  or  gluts,  but  were  doing  it  for  the  purpose 
of  influencing  the  price  and  we  would  be  charged  with  it  under  the 
Sherman  Act  if  we  did,  and  it  would  be  misconstrued  as  to  what  we 
were  meeting  for. 

Mr.  Tincher.  May  I ask  you  a question  ? 

Mr.  Lightfoot.  Yes,  sir;  certainly. 

Mr.  Tincher.  Your  statement  concerning  the  decision  of  the 
Supreme  Court  of  the  United  States  holding  that  there  was  nothing 
wrong  in  you  having  an  organization  to  prevent  gluts 

Mr.  Lightfoot  (interposing).  It  is  so  recognized.  I consider  it  a 
very  good  practice. 

Mr.  Tincher.  Did  the  Veeder  pool  hold  meetings  so  as  to  prevent 
gluts  ? 

Mr.  Lightfoot.  That  was  exactly  the  purpose. 

Mr.  Tincher.  When  they  met  and  divided  the  farmers’  cattle 
among  themselves,  that  was  for  the  purpose  of  preventing  gluts  ? 

Mr.  Lightfoot.  You  are  mistaken  about  that.  I am  trying  to 
give  you  the  facts.  The  Veeder  pool  was  merely  to  regulate  ship- 
ments into  the  consuming  sections — Pittsburgh,  Buffalo,  and  all  the 
places  East — so  that  they  would  not  ship  more  stuff  in  there  than 
could  be  sold  at  a reasonable  profit.  You  must  bear  in  mind  that 
fresh  meat  must  be  disposed  of  within  two  weeks  from  the  time  of 
slaughtering  or  there  is  deterioration  which  will  wipe  out  the  small 
profit,  and  if  it  was  found  that  there  was  more  stuff  in  the  market 
than  could  be  consumed  at  a fair  price,  they  attempted  to  regulate 
that  so  as  to  eliminate  the  glut.  That  was  seized  upon  as  a circum- 
stance, and  to  the  ordinary  mind  not  familiar  with  the  intricate 
machinery  and  the  highly  specialized  nature  of  this  business  would 
be  used  as  a circumstance  against  any  person  as  an  improper  practice, 
which  would  be  bound  to  result  in  something  which  would  violate 
the  law  or  to  regulate  the  price,  or  something  of  that  kind. 


MEAT  PACKER. 


261 


Mr.  Kincheloe.  Was  not  the  territory  not  only  divided,  but  the 
business  of  each  packer  apportioned  ? 

Mr.  Lightfoot.  They  tried  that,  but  I do  not  think  they  ever 
succeeded. 

Mr.  Kincheloe.  And  there  is  a penalty? 

Mr.  Lightfoot.  Yes,  sir;  that  was  to  enforce  the  rule  for  the 
purpose  of  preventing  the  glut. 

Mr.  Kincheloe.  What  I am  looking  at  is  the  consumer.  Do  you 
think  that  would  help  the  price  of  the  producer  ? 

Mr.  Lightfoot.  If  you  ask  my  opinion  on  that  point,  I would  say 
that  my  study  of  the  antitrust  laws  and  the  spirit  of  them  has  led  me 
to  the  conclusion  that  the  effort  to  compel  active,  open,  vicious  com- 
petition as  the  principle  governing  American  business  in  a great 
many  respects  operates  as  a waste  and  loss  and  produces  an  uneco- 
nomical situation  that  increases  the  cost  of  many  of  the  necessaries  of 
life.  I think  it  would  be  a good  thing  for  Congress  to  modify  the 
Sherman  Act  as  to  the  producers,  especially  of  perishable  products, 
so  they  might  cooperate  with  each  other  without  threat  of  prosecu- 
tion, in  the  distribution  of  their  products,  so  as  to  prevent  this  waste. 
I do  not  know  whether  it  would  be  possible  to  avoid  the  waste  or  not. 
The  principle  is  whether  or  not  it  is  proper  for  them  to  cooperate  to 
regulate  shipments  in  order  to  prevent  gluts  or  waste.  I think,  how- 
ever, with  such  a modification,  under  the  supervision  of  the  Govern- 
ment or  some  governmental  agency,  which  would  have  the  power  and 
right  to  keep  that  matter  under  its  observation  all  the  time  and  see 
when  it  was  unduly  enhancing  the  price  or  creating  a profit 

Mr.  Kincheloe  (interposing).  From  my  viewpoint  as  a Congress- 
man, in  a representative  capacity,  it  is  not  the  point  with  me,  whether 
it  was  illegal  for  those  gentlemen  to  do  that — I grant  that  it  was  legal 
under  the  injunction  that  you  speak  of,  but  the  point  I look  at,  I can 
not  see  that  it  would  be  of  benefit  to  the  consumer  or  to  the  general 
public — it  is  a nefarious  practice,  whether  legal  or  not. 

Mr.  Lightfoot.  You  might  be  entirely  correct.  It  is  a question  of 
viewpoint.  I say  this,  if  you  have  a thousand  carcasses  of  beef  in 
New  York  to-day,  more  than  the  population  can  consume,  and  the 
packers  must  throw  them  into  rendering  plants,  or  burn  them,  it  does 
not  benefit  the  consumer  or  the  producer;  it  is  a waste  of  food  supply 
that  is  lost  to  the  country,  and  if  that  could  have  been  so  controlled  so 
that  the  flow  of  meat  into  New  York  would  have  been  more  in  con- 
formity with  the  demand,  I think  that  would  have  been  in  the  interest 
of  the  consumer  because  it  would  have  provided  a reserve  supply.  I 
think  it  would  go  far  toward  stabilizing  the  fluctuations  in  the  stock- 
yards  that  the  producers  complain  of. 

Mr.  Kincheloe.  You  do  not  mean  to  leave  the  impression  that  the 
packers  have  destroyed  and  burned  any  considerable  number  of 
carcasses  with  their  facilities  for  cold  storage  ? 

Mr.  Lightfoot.  You  would  be  surprised  at  the  loss,  sir.  The 
American  people  will  not  eat  frozen  meat.  You  chill  it  to  the  extent 
necessary,  but  if  kept  too  long  it  deteriorates.  I do  not  want  to  take 
up  anymore  time. 

Mr.  Tincher.  As  you  say,  the  backgrounds  have  considerable  to 
do  with  this  legislation,  but  there  are  other  things  that  stand  out  con- 
cerning it.  For  instance,  it  was  stated  before  the  committee,  and  I 
have  never  heard  it  denied,  that  the  members  of  the  pool  used  to  com 


262 


MEAT  PACKER. 


tribute  small  sums  of  $50,000  which  were  used  in  different  ways  and 
no  record  was  kept  of  it,  the  corporation  kept  no  record  of  it. 

Mr.  Lightfoot.  You  want  me  to  answer  that? 

Mr.  Tincher.  Yes.  Would  not  that  be  some  background  ? 

Mr.  Lightfoot.  I do  not  think  so.  I do  not  think  you  will  find 
any  practice  of  that  kind.  I think  we  have  had  joint  funds  that  we 
raised  at  times  to  pay  entirely  legitimate  expenses.  For  instance, 
a vicious  bill  affecting  this  industry  is  introduced  in  any  State  legis- 
lature, and  it  is  necessary  to  have  a hearing  or  there  is  a hearing  on 
that  bill  which  affects  the  whole  industry  in  a matter  of  legislation; 
why  should  300  packers  be  required  to  send  300  men  representing 
each  one  of  those  packers  down  there  to  appear  before  that  committee 
to  lay  before  it  the  facts  affecting  the  whole  industry?  We  employ 
counsel  and  send  them  to  these  different  hearings.  There  are  48 
States  in  the  Union,  and  they  usually  have  bills  in  every  legislature 
in  the  States  that  affect  this  industry  in  some  respect. 

Mr.  Tincher.  Does  this  association  here  in  Washington  keep  a 
complete  record  of  their  finances  ? 

Mr.  Lightfoot.  Absolutely. 

Mr.  Tincher.  Who  is  the  treasurer  of  that  association?  . Who 
could  I get  that  record  from  for  the  past  year?  I will  say  to  you 
gentlemen  now,  who  are  the  officers  of  it,  that  I would  like  the  head 
officer  of  that  institution,  or  the  man  who  has  charge  of  the  finances, 
to  appear  before  this  committee  and  show  their  receipts  and  disburse- 
ments, and  give  us  a chance  to  find  out  what  their  disbursements 
were  last  year. 

Mr.  Lightfoot.  I have  no  doubt  the  Institute  of  American  Meat 
Packers  would  be  glad  to  furnish  to  Congress  any  information  as  to 
their  activities  in  any  respect  whatsoever. 

Mr.  Tincher.  You  are  a member  of  that  organization  and  you 
gentlemen  will  have  charge  of  a certain  amount  of  the  time ; will  you 
get  that  information  for  me  and  bring  it  here  ? 

Mr.  Lightfoot.  I am  not  a member  of  the  association  myself,  Mr. 
Tincher. 

Mr.  Tincher.  Have  they  a representative  here  in  the  room  now — 
the  American  Institute  of  Meat  Packers  ? 

Mr.  Lightfoot.  Mr.  Ryan  is  a member  of  the  association. 

Mr.  Tincher.  How  much  money  did  they  raise  last  year  ? Do  you 
know  how  much  they  used  ? 

Mr.  Lightfoot.  I do  not  know,  but  I assure  you  that  whatever 
money  they  did  raise  and  whatever  money  was  used  was  used  for  an 
entirely  legitimate  purpose,  in  every  respect  whatsoever,  and  further- 
more, I think  they  were  justified. 

Mr.  Tincher.  Do  you  know  how  much  Wilson  & Co.  paid  into  the 
association  ? 

Mr.  Lightfoot.  That  is  provided  in  the  by-laws.  The  funds  of 
the  institute  are  raised  by  assessments  of,  I think,  so  much  a head 
of  slaughter  for  the  animals  by  all  the  members,  and  in  that  way  it  is 
distributed  among  all  of  them. 

Mr.  Tincher.  In  the  olden  days,  the  Trade  Commission  states  that 
they  used  these  funds  for  purposes  like  this : To  employ  lobbyists  and 
paid  their  unaudited  expenses 

Mr.  Lightfoot  (interposing).  I do  not  know  what  you  mean  by 
lobbyists. 


MEAT  PACKER. 


263 


Mr.  Tincher.  Well,  unaudited  expenses;  you  know  what  that 
means. 

Mr.  Lightfoot.  Yes,  sir;  I know  what  that  means. 

Mr.  Tincher.  Any  legitimate  expense  can  be  audited. 

Mr.  Lightfoot.  I know;  but  who  wanted  them  audited?  That  is 
one  of  the  insinuations  and  innuendoes  that  are  in  the  Federal  Trade 
Commission  report  and  runs  all  the  way  through  it. 

Mr.  Tincher.  I will  say  this 

Mr.  Lightfoot  (continuing).  It  is  a very  adroitly  drawn  report. 
Has  any  Government  official  ever  demanded  the  auditing  of  those 
accounts  ? Is  there  any  authority  in  the  Government  to-day  vesting 
any  one  with  the  power  to  demand  an  auditing  of  private  accounts  of 
that  kind  ? If  there  is,  I would  like  to  see  the  law. 

Mr.  Tincher.  Assuming  there  is  not  any  law,  you  practiced  law, 
like  I did,  before  you  went  to  work  with  the  packers,  and  you  never 
rendered  an  expense  account  to  your  client  in  your  life  but  what 
you  would  have  been  willing  to  have  had  it  audited  or  itemized? 

Mr.  Lightfoot.  Yes. 

Mr.  Tincher.  If  you  are  working  for  a company  now,  or  if  there 
is  a company  here  in  Washington  putting  out  great  big  chunks  of 
money  and  not  requiring  any  audited  or  itemized  statement  of  how 
that  money  is  spent,  you  and  I have  our  own  views  about  how  it  is 
being  used. 

Mr.  Lightfoot.  Yes,  Mr.  Tincher;  but  I call  your  attention  to  this 
fact:  No  one  has  ever  demanded  any  auditing  of  those  expense 
accounts.  The  Federal  Trade  Commission  did  not  ask  for  any 
explanation  of  those  accounts.  They  would  take  a bill  with  what- 
ever it  showed,  and  you  say  you  have  one  of  $50,000.  I do  not  know 
whether  that  is  correct  or  not. 

Mr.  Tincher.  A single  assessment  of  $50,000  ? 

Mr.  Lightfoot.  Or  an  assessment  of  $50,000.  Suppose  it  was 
$50,000,  the  Federal  Trade  Commission  did  not  ask  for  any  explana- 
tion of  that.  They  never  asked  the  packers  for  any  explanation  of 
anything,  and  I hold,  and  I think  justly  and  properly  so,  that  that  is 
responsible  for  nine-tenths  of  the  misinformation  and  confusion  that 
exists  in  this  subject  to-day.  They  took  those  things  and  they  drew 
their  own  conclusions.  If  they  had  an  assessment  of  $50,000,  say, 
and  it  had  no  further  explanatory  facts,  why  did  they  not  ask  Mr. 
Veeder  or  the  packers  for  an  auditing  and  an  explanation  of  why 
that  was  ? It  may  have  been  that  every  cent  of  it — and  I think  it 
was,  from  my  knowledge  of  the  operation  and  how  their  business  is 
run — was  expended  properly.  I believe  that  could  be  shown,  but 
instead  of  eliciting  that  information,  they  voluntarily  used  the  words 
“ unaudited  expenses,”  in  order  to  carry  with  it  the  very  insinuation 
you  are  giving  it  here,  and  I say  that  is  unfair. 

Mr.  Tincher.  I want  to  answer  one  little  statement  you  made 
there  simply  for  the  benefit  of  the  members  of  the  committee  who 
were  not  here  at  the  former  hearings. 

Mr.  Lightfoot.  Yes. 

Mr.  Tincher.  You  say  the  Federal  Trade  Commission  never  asked 
the  packers  to  explain  anything.  I will  say  to  you,  and  I hold  no 
brief  for  the  Federal  Trade  Commission,  that  one  of  the  members  of 
that  commission  appeared  before  this  committee  at  the  last  session 
of  Congress,  and  answered  every  criticism  that  the  packers  had  made 


264 


MEAT  PACKER. 


of  their  report  and  challenged  the  packers  to  produce  certain  informa- 
tion for  this  committee  and  asked  them  to  do  so,  and  that  information 
was  not  produced  by  the  packers. 

Mr.  Lightfoot.  I have  no  information  about  what  that  was 
although  I attended  most  of  these  hearings. 

Mr.  Tincher.  I do  not  say  it  was  proper  that  you  should  have 
done  so. 

Mr.  Lightfoot.  I will  say  to  you  now  that  if  there  is  any  informa- 
tion, wherever  it  was  in  the  record,  that  the  Federal  Trade  Commis- 
sion challenged  the  packers  to  produce,  or  explain,  if  you  are  in- 
terested in  it,  I will  promise  you  that  you  will  have  the  answer  to  it 
and  the  explanation  of  it.  There  is  so  much  of  that  stuff  it  is  im- 
possible, of  course,  to  keep  up  with  it.  These  hearings  have  been 
very  extensive,  and  a great  many  matters  have  been  gone  into,  and 
it  may  be  possible  that  some  witness  may  have  offered  to  bring 
before  you  certain  evidence,  but  I will  say  to  you  this,  and  in  all 
sincerity,  because  we  are  simply  interested  in  this  committee  knowing 
what  the  facts  and  the  truth  about  this  whole  industry  are — we  have 
nothing  to  conceal  and  we  feel  that  if  you  did  know  the  facts  about  a 
number  of  these  things  you  would  not  be  actuated  to  adopt  or  recom- 
mend legislation  that  goes  as  far  as  some  of  these  bills  have  gone  for 
the  control  and  regulation  of  this  industry,  because  that  will  be 
destructive  of  it.  We  are  trying  to  show  that  in  the  interest  not 
only  of  the  packers  themselves,  which  they  would  be  justified  in 
doing  from  a selfish  standpoint,  but  in  the  interest  of  the  producer 
and  consumer  of  this  country — you  heard  Mr.  Campbell  here  the  other 
day  tell  how  the  producers  of  California  were  affected  by  the  destruc- 
tion of  packer  distribution  of  fruit,  etc.,  through  the  most  highly 
organized  distributive  system  in  America — we  are  now  trying  to 
prevent  you  from  doing  something  that  is  going  to  destroy  this 
industry,  not  only  for  the  benefit  of  California,  but  for  the  producers 
of  live  stock  and  poultry,  butter,  eggs,  and  cheese,  all  over  this 
country,  because  the  packers  can  not  stand  this  kind  of  gaff  all  the 
time.  They  are  not  immortal. 

Mr.  Tincher.  With  all  this  background  and  with  all  these  things 
coming  up  from  time  to  time,  do  you  not  really  think  it  is  time  we 
have  a constructive  law  and  have  some  regulation  of  the  matter  that 
will  tend  to  stabilize  the  whole  proposition.  You  know  that  I am 
not  in  favor  of  putting  the  packer  out  of  business. 

Mr.  Lightfoot.  I do  not  believe  you  are. 

Mr.  Tincher.  Or  of  destroying  the  business  of  my  constituency 
and  my  entire  district.  You  know  that  those  people  back  there  are 
not  satisfied  with  existing  conditions,  and  you  know  that  there  is  a 
background  for  the  proposition  that  there  ought  to  be  legislation  on 
this  subject. 

Mr.  Lightfoot.  Yes. 

Mr.  Tincher.  Then,  why  do  you  come  here,  when  we  talk  about 
legislation,  and  say  that  this  is  all  in  the  past  and  have  men  appear 
here  like  they  did  the  other  day  and  say  that  the  thing  to  do  with 
these  bills  is  to  strike  out  all  after  the  enacting  clause.  Why  do  we 
not  get  down  to  business  and  have  legislation  that  will  not  destroy 
anyone  and  then  end  the  whole  business. 

Mr.  Lightfoot.  I think  that  is  a fair  question  and  I think  you  are 
entitled  to  an  answer  to  it.  Of  course,  I merely  got  up  to  correct 


MEAT  PACKER. 


265 


you  on  a law  point.  I am  not  authorized  to  speak  for  this  industry 
on  this  point,  but  I can  give  you  what  to  my  mind,  personally,  is 
the  reason  why  we  have  not  done  that.  In  the  first  place,  we  have 
not  had  a chance  to  sit  down  with  anybody  on  any  constructive 
measure  that  would  be  helpful  to  this  industry  or  to  the  producers 
or  consumers  of  this  country.  We  have  been  in  a battle  now  for 
three  years  defending  ourselves  against  what  we  have  warned  Congress 
and  the  people  against  from  the  very  beginning,  defending  ourselves 
against  measures  that  would  destroy  us. 

Mr.  Voigt.  Mr.  Lightfoot,  you  say  you  have  had  no  chance  to  sit 
down  with  anybody  to  talk  about  constructive  legislation. 

Mr.  Lightfoot.  Yes,  sir. 

Mr.  Voigt.  You  have  had  plenty  of  opportunity  to  appear  at 
all  these  hearings  and  make  any  suggestions  you  saw  fit,  and  you 
have  that  opportunity  now. 

Mr.  Lightfoot.  Well,  I probably  made  that  a little  too  broad, 
Mr.  Voigt,  but  here  is  what  I mean:  I do  not  think  that  the  com- 
mittees of  Congress,  I do  not  think  public  opinion  as  the  result  of 
the  impression  created  by  the  Federal  Trade  Commission  report, 
has  been  in  any  state  where  our  minds  could  have  met  on  a matter 
of  that  kind,  for  the  reason  that  the  Federal  Trade  Commission  report 
when  it  came  out  naturally  inflamed  public  opinion  of  this  country. 

Mr.  Voigt.  I do  not  think  it  has  inflamed  the  minds  of  this  com- 
mittee, and  I just  want  to  correct  the  impression  that  goes  out  for 
your  statement.  You  have  every  opportunity  to  appear  before  this 
committee  and  state  what  you  think  ought  to  be  enacted  in  the  shape 
of  legislation. 

Mr.  Lightfoot.  If  you  will  just  permit  me  a moment,  I will  get 
to  that  point.  First,  what  did  the  Federal  Trade  Commission 
recommend  ? The  recommendation  of  the  Federal  Trade  Commission 
is  not.  the  bill  you  are  considering  to-day.  If  it  had  been  left  for 
them  to  write  the  law  after  that  report  came  out,  what  would  they 
have  written  ? They  would  have  required  the  Railroad  Administra- 
tion of  the  United  States  Government  to  have  taken  over  the  stock- 
yards,  declared  them  a public  monopoly,  and  operated  them  as  a 
Government  agency.  They  would  have  required 

Mr.  Voigt  (interposing).  That  is  beside  the  question  because  the 
Federal  Trade  Commission  is  not  going  to  write  the  bill. 

Mr.  Lightfoot.  I know  that,  but  the  bill  which  followed  that 
report  was  tantamount  to  that.  The  Sims  bill  then  came  out  and 
the  Kenyon  bill.  Senator  Kenyon  and  Mr.  Sims  introduced  a bill 
in  which  they  provided  for  remedies  tantamount  to  it.  Although 
not  specifically  providing  for  ownership;  in  other  words,  the  Sims  bill 
and  the  original  Kenyon  bill  provided  a system  for  the  packers 
under  which  the  Government  would  have  had  the  power  to  make 
rules  and  regulations,  and  could  cancel  your  license  for  the  slightest 
infraction  of  those  rules  and  put  you  out  of  business  overnight 
without  any  redress.  We  had  to  fight  that  proposition.  We  could 
not  come  in  and  effectively  talk  to  those  gentlemen  about  what 
would  be  reasonable  and  constructive  legislation.  We  had  to 
defend  ourselves  against  that,  and  after  we  had  made  the  fight 
they  abandoned  that. 

Then  they  introduced  another  system  of  bills  for  a license,  aban- 
doning some  of  the  original  provisions  of  the  Sims  and  Kenyon  bill. 


266 


MEAT  PACKER. 


Following  that,  the  Congress  abandoned  the  license  system,  and 
even  the  American  National  Live  Stock  Association,  who  started 
all  this  agitation,  abandoned  that  position  and  said  they  did  not 
think  there  ought  to  be  any  laws  passed  for  the  control  of  this 
industry  where  autocratic  or  despotic  powers  could  be  exercised 
by  the  agency  created. 

Mr.  Voigt.  Pardon  me,  but  that  is  all  in  the  past. 

Mr.  Lightfoot.  Yes;  I know,  but  I am  leading  down  to  the 
point  you  raise. 

Mr.  Voigt.  Are  you  going  to  make  any  suggestions  to  this  com- 
mittee as  to  legislation  ? 

Mr.  Lightfoot.  So  far  as  I am  concerned,  Mr.  Voigt,  I could 
make  you  some  suggestions,  if  the  committee  feels  that  legislation 
will  solve  the  economic  problems  that  are  at  the  root  of  this  case. 
This  is  not  a legislative  problem.  It  is  really  an  economic  propo- 
sition. The  fluctuations  of  receipts  of  live  stock  in  the  yards  that 
cause  the  prices  to  fluctuate  up  and  down,  sometimes  sharply,  are 
largely  responsible  for  the  dissatisfaction  among  the  producers  of 
live  stock  who  created  the  agitation  that  brought  about  all  these 
hearings  and  the  bills  that  have  been  proposed. 

Now,  there  is  not  a thing  in  these  bills,  even  if  you  enacted  any 
one  of  them,  I do  not  care  whether  it  is  the  McLaughlin  bill  or  any 
of  the  other  bills,  that  touches  that  problem  top,  side  or  bottom, 
and  until  that  question  is  settled  or  some  means  are  provided  whereby 
there  can  be  such  cooperation  between  the  packers  and  the  pro- 
ducers of  live  stock  whereby  they  can  regulate  the  flow  of  live  stock 
into  the  markets  more  in  accordance  with  the  demands  of  the  con- 
suming public,  you  are  going  to  have  that  condition,  and  you  are 
not  going  to  eliminate  the  trouble  at  all. 

So  I could  make  a suggestion.  If  you  would  modify,  say,  the 
Sherman  Act  so  as  to  permit  the  cooperation  between  the  packers 
and  the  producers,  under  the  supervision  of  the  Government,  under 
any  bureau  of  the  Department  of  Agriculture  or  anyone  else,  to 
see  that  the  prices  were  not  unduly  enhanaced,  or  that  there  was 
not  a restraint  of  trade,  I think  you  will  go  further  toward  solving 
this  whole  problem  than  anything  that  has  been  suggested  in  any 
bill  here. 

Mr.  Tincher.  Mr.  Lightfoot,  you  were  here  when  the  Secretary 
of  Agriculture  made  his  statement  ? 

Mr.  Lightfoot.  No;  I regret  I could  not  be  here  in  time.  I did 
not  hear  his  statement. 

Mr.  Voigt.  You  want  some  governmental  agency  to  regulate 
prices?  * 

Mr.  Lightfoot.  I think  there  ought  to  be  some  supervision  of  the 
shipments.  I think  if  the  prices  are  unduly  enhanced  upon  complaint 
being  made,  that  can  be  handled,  just  like  the  provision  in  the 
Capper-Volstead  bill.  You  have  had  that  bill  before  you.  The 
principle  of  that  bill  is  not  bad,  and  you  have  to  come  to  something 
of  that  kind.  But  for  you  to  set  up  the  Sherman  Act  here,  with  all  its 
menaces,  with  all  its  threats,  to  force  actual,  independent  competi- 
tion, without  the  slightest  cooperation  that  would  tend  even  to  affect 
prices,  and  then  at  the  same  time  expect  industries  that  involve  the 
great  interests  of  production  and  manufacture  and  of  distribution 


MEAT  PACKER.  267 

to  operate  in  a way  to  solve  the  economic  problems  without  coopera- 
tion, is  an  impossibility. 

Mr.  Gernerd.  Mr.  Lightfoot,  right  there,  I have  enjoyed  your 
argument,  and  what  you  have  said  has  sort  of  convinced  me  that  it 
high  time  for  the  packers  to  get  busy  and  join  with  this  committee  in 
getting  intelligent  legislation  through,  and  then  you  will  be  relieved 
of  all  these  tantalizing  and  destructive  influences  that  are  growing 
up  all  the  time. 

Mr.  Lightfoot.  Yes,  sir;  there  is  nobody  who  would  welcome  that 
more  than  the  packers,  if  you  can  get  something  that  is  helpful  and 
constructive. 

Mr.  Gernerd.  You  folks  are  experts  in  that  business,  why  do  you 
not  help  to  draft  us  something  ? 

Mr.  Lightfoot.  It  would  be  a pretty  difficult  proposition  for  me 
to  do  that. 

Mr.  Gernerd.  Taking  the  Haugen  bill,  or  any  one  of  these  bills, 
could  we  not  use  that  as  a foundation  and  get  your  views  and  really 
get  together? 

Mr.  Lightfoot.  Whenever  Congress,  Mr.  Congressman,  says  that 
it  is  ready  to  sit  down  and  work  out  a constructive  program  of  legis- 
lation— that  is,  of  supervision — so  that  the  public  will  know,  so  that 
the  Congress  will  know,  and  so  that  the  producers  will  know  at  any 
time  whether  our  profits  are  fair  and  reasonable,  whether  our  service 
is  efficient  and  economical  and  whether  our  treatment  of  competitors 
and  the  public  is  fair  or  not,  I do  not  think  you  will  find  that  the  pack- 
ers will  refuse  to  go  into  a consideration  of  that  question. 

Mr.  Tincher.  Let  me  make  a suggestion,  inasmuch  as  we  started 
this  argument  let  us  finish  it.  That  has  been  the  attitude  of  this 
committee  ever  since  I have  been  on  the  committee,  and  I think  you 
appreciate  that.  You  have  been  attending  the  hearings  here. 

Mr.  Lightfoot.  Yes. 

Mr.  Tincher.  You  can  not  accomplish  that  by  bringing  witnesses 
here  from  afar  to  testify  that  the  thing  to  do  with  this  legislation  is 
to  strike  out  all  after  the  enacting  clause. 

Mr.  Lightfoot.  On  that,  Mr.  Tincher,  I want  to  say  that  I do  not 
think  there  has  ever  been  a fairer  committee  of  Congress  than  this 
committee.  The  packers  have  not  the  slightest  criticism  of  the  man- 
ner in  which  this  committee  has  conducted  its  hearings.  You  have 
given  us  as  much  and  in  some  respects  more  freedom  to  bring  out  the 
facts  than  any  other  committee  that  we  have  appeared  before  in 
Congress;  and  while  the  other  committees  have  treated  us  with  uni- 
form courtesy,  this  committee  has  been  unusually  anxious  and  fair 
toward  trying  to  get  the  facts;  but  I will  say  this,  we  do  not  bring 
witnesses  here  and  tell  them  what  to  say. 

Mr.  Tincher.  Oh,  no. 

Mr.  Lightfoot.  Nobody  can  tell  Gen.  Ryan  what  he  should  tell 
this  committee.  If  he  thought  there  should  not  be  any  legislation, 
I do  not  think  the  whole  institute  of  American  meat  packers  could 
induce  him  to  say  there  should  be  some.  The  witnesses  come  here 
to  express  their  views,  but  I want  to  say  that  so  long  as  the  committee 
attaches  importance  to  a great  many  of  the  little  things  that  have 
been  put  forth  here  in  this  adroit  way,  that  seem  to  carry  weight, 
to  the  effect  that  the  packers  are  a bunch  of  criminals  and  crooks, 
that  they  are  conspiring  against  the  public  interest  every  day,  and 


268 


MEAT  PACKER. 


when  those  things  are  emphasized,  we  feel  that  we  must  try  to  clear 
those  things  out  of  your  mind  before  there  can  be  any  meeting  of 
minds.  If  you  are  going  to  legislate,  in  other  words,  against  us  on 
the  assumption  that  we  are  violating  the  law  every  day,  and  that 
you  must  have  some  tribunal  with  autocratic  and  arbitrary  powers 
to  prevent  us  from  doing  that,  I do  not  think  we  could  ever  get 
together:  but  if  you  can  see  this  thing  as  we  see  it,  and  as  I know  it  to 
be,  and  you  want  to  work  out  some  supervisory,  helpful,  and  con- 
structive legislation,  so  that  the  public  and  Congress  may  know  the 
truth,  and  will  know  whether  our  profits  are  what  we  say  they  are, 
and  we  ha  we  offered  before  committees  of  Congress,  and  I propose 
it  to  this  committee  now,  if  you  are  not  satisfied,  you  may  employ 
any  reputable  firm  of  certified  public  accountants  you  want  to, 
we  do  not  care  who  they  are,  and  put  them  on  our  books,  and  we 
will  open  our  books  to  them,  and  if  they  do  not  bring  back  to  you 
a report  that  our  profits  or  our  losses  are  what  we  have  stated  they  are, 
then  you  can  pass  any  kind  of  legislation  you  want. 

Mr.  Kincheloe.  You  say  that  as  long  as  we  adhere  to  some  of 
these  alleged  insinuations  by  reason  of  this  Federal  Trade  Commission 
report,  so  far  as  I am  concerned,  I am  at  this  hearing  simply  to  get 
information-  that  is  all.  It  is  not  a Sunday  school  jaunt  with  me. 
What  I want  is  information.  Now,  in  view  of  the  statement  Mr. 
Tincher  made,  that  a member  of  the  Federal  Trade  Commission 
testified  here  at  a former  hearing  and  set  out  some  items  there  and 
defied  or  rather  challenged — probably  he  did  not  put  it  that  strong 
you  to  bring  your  records,  and  with  as  good  lawyers  as  they  have 
here — and  I know  you  personally  although  I do  not  know  the  rest  of 
. them — why  can  you  not  bring  those  matters  here  and  present  them  to 
this  committee  who  are  seeking  nothing  but  facts. 

Mr.  Ligiitfoot.  If  you  will  just  find  that  and  will  tell  me  what  it  is 
you  want,  I guarantee 

Mr.  Kincheloe.  I guess  Mr.  Tincher  can  find  it. 

Mr.  Lightfoot  (continuing).  I will  guarantee  we  will  get  it,  and 
furthermore,  anything  that  is  not  in  there  that  he  wants  or  that  may 
occur  to  your  minds,  any  fact  about  this  business  from  begining  to 
end,  in  whatever  department,  if  you  want  it,  I will  promise  you  right 
now  you  will  get  it  and  will  see  to  it  personally  that  you  do  get  it. 

Mr.  Clarke.  Let  us  get  right  dowm  to  that  one  matter.  Give  us  a 
statement  of  wThat  it  was. 

Mr.  Tincher.  It  was  in  reference  to  certain  facts  concerning  the 
ownership  of  the  stockyards. 

Mr.  Lightfoot.  But  we  do  not  own  any  interest  in  the  stockyards. 

Mr.  Tincher.  No;  his  quarrel  was  with  Swift  A Co. 

Mr.  Lightfoot.  That  is  just  the  way  with  that  report,  and  I will 
just  point  out  that  one  thing.  All  the  way  through  you  have  seen  it 
charged  that  a combination  of  the  Big  Five  owned  the  stockyards  of 
this  country,  and  that  by  reason  of  their  ownership  they  were  able 
to  manipulate  the  market.  The  Federal  Trade  Commission  says 
that  the  Big  Fve  own  thess  stockyards.  They  state  that  in  the  face 
of  the  fact  that  Wilson  & Co.  never  owned  any  interest  in  any  public 
stockyards  market  in  this  country,  at  that  time  or  since  or  before: 

Mr.  Tincher.  I want  to  address  myself  to  this  proposition:  We 
probably  will  never  be  able  to  convince  the  packers  that  the  Federal 


MEAT  PACKER. 


269 


Trade  Commission  is  all  right  and  we  will  never  be  able  to  convince 
the  Federal  Trade  Commission  that  the  packers  are  all  right. 

Mr.  Lightfoot.  Well,  probably  not. 

Mr.  Tincher.  You  say  that  whenever  we  get  down  to  a working 
basis  and  want  to  get  the  legitimate  facts — I want  to  suggest  to  you 
something  that  we  all  know  about  and  something  that  the  committee 
has  had  to  contend  with.  You  say,  of  course,  that  the  American 
Meat  Packers’  Association,  or  whatever  it  is  called,  does  not  tell  a 
witness  what  to  say.  That  is  new  information.  That  is  an  improve- 
ment. When  I first  came  to  Congress,  the  witnesses  who  w^ere 
coming  here  and  appearing  before  these  committees,  were  coming 
here  with  typewritten  statements  prepared  by  the  American  Meat 
Packers’  Association  up  in  their  offices. 

Mr.  Lightfoot.  Do  you  know  they  were  prepared  by  the  institute  ? 

Mr.  Tincher.  They  were  taken  up  there  after  the  witnesses 
would  come  here  to  testify  and  would  come  here  with  these  type- 
written statements. 

Mr.  Lightfoot.  Why,  you  can  have  that  done  yourself. 

Mr.  Tincher.  We  have  got  to  get  away  from  that  kind  of  stuff 
when  we  legislate. 

Mr.  Lightfoot.  Now,  let  us  be  fair  about  this. 

Mr.  Clarke.  They  were  true  statements,  were  they  not  ? 

Mr.  Tincher.  I do  not  think  they  were  entirely  true;  that  is, 
those  typewritten  statements  they  used  to  bring  down  here  from 
the  institute. 

Mr.  Lightfoot.  Wait  a moment,  Mr.  Tincher.  I know  you  want 
to  be  fair  and  I want  you  to  have  the  facts.  You  can  get  a type- 
written statement  at  the  Institute  of  American  Meat  Packers  to-day 
if  you  go  up  there  and  take  advantage  of  our  facilities  and  dictate 
to  our  stenographers  what  you  want.  If  you  were  coming  here  as 
a witness  and  you  desired  certain  facts  or  certain  information  to  be 
accurate,  and  witnesses  ought  to  be  accurate  as  to  their  facts,  as 
much  so  as  they  can,  otherwise  their  testimony  is  of  no  value  to 
Congress,  and  if  you  wanted  to  find  out  what  the  exports  of  live 
stock  were  or  of  meat  or  what  the  sales  of  the  packers  were  or  what 
their  profits  were,  or  any  of  the  detailed  facts  about  that,  you  could 
go  up  there  and  get  it,  and  those  are  the  things  that  the  different 
witnesses  have  called  upon  the  institute  to  furnish.  There  is  no  one 
in  the  institute  who  has  been  in  the  habit  of  writing  out  a statement 
of  what  a witness  should  say,  and  handing  it  to  him  and  letting  him 
come  down  here  and  read  it. 

Mr.  Tincher.  They  read  so  much  alike  that  they  were  liable  to 
that  construction. 

Mr.  Lightfoot.  They  were  discussing  the  same  general  subjects. 

Mr.  Tincher.  Now,  let  us  get  down  to  this  proposition.  I believe 
there  is  going  to  be  legislation  on  this  subject.  I think  that  is  pretty 
well  evidenced  by  the  attitude  that  the  Secretary  of  Agriculture 
took  this  morning  on  the  subject.  Assuming  now  that  we  are  going 
to  stop  all  this  business  and  have  some  real  constructive  legislation 
that  will  not  put  you  out  of  business  but  that  will  be  of  benefit  to  the 
whole  country,  treat  the  matter  from  that  standpoint  a while  and 
see  if  you  can  not  be  of  assistance. 

Mr.  Lightfoot.  We  will  be  very  glad  to  do  that. 


270 


MEAT  PACKER. 


Mr.  Tincher.  I am  not  authorized  to  speak  for  any  member  of 
the  committee  except  myself,  but  I think  I am  safe  in  saying  that  the 
attitude  of  Congress  and  the  attitude  of  the  Nation  is  to  stop  this 
thing  and  to  stop  it  by  legislation,  and  I am  sure  that  nobody  wants 
anything  except  constructive  legislation. 

Mr.  Lightfoot.  That  is  all  right.  I am  glad  to  hear  you  say  that. 
We  do  not  think,  as  I said  before — at  least,  I do  not — that  the 
measures  provided  here  in  these  bills,  even  the  best  ones  of  them,  will 
entirely  go  to  the  root  of  this  trouble.  Therefore,  we  can  not  say  to 
you  that  we  think  this  is  going  to  be  helpful.  We  do  not  want  to 
come  back  two  years  from  now  and  have  further  agitation  that  we 
need  to  strengthen  the  law  because  it  has  not  done  so.  I want  to 
warn  you  now  that  unless  there  can  be  something  brought  about 
where  there  can  be  a closer  cooperation,  within  the  spirit  and  letter 
of  the  laws  of  this  country,  between  the  producing  and  the  packing 
elements,  nothing  you  have  provided  in  these  bills  is  going  to  elimi- 
nate that  situation.  However,  there  is  a psychology  that  exists  in 
the  public  mind  to-day  that  we  recognize.  We  do  not  say  that  any 
act  you  might  pass  is  going  to  clear  that  up,  but  if  you  feel  it  is 
essential  to  have  some  kind  of  legislation,  and  if  your  minds  have 
been  made  up  that  you  are  going  to  report  out  something  in  order  to 
meet  the  psychology  of  the  public  mind  on  that  situation,  if  you  then 
can  work  out  something  that  would  be  reasonable  and  that  will  not 
be  destructive 

Mr.  Clarke  (interposing) . Right  there,  while  we  are  on  that  point, 
my  idea,  Mr.  Chairman,  is  this,  that  Mr.  Lightfoot  take  the  testimony 
of  the  Secretary  and  your  bill  as  a basis  and  as  something  definite  to 
start  on,  prepare  a bill  that  will  meet  the  objections  and  criticisms, 
and  needs,  as  the  Secretary  brought  them  out  to-day,  and  submit 
that  to  this  committee.  Would  you  be  willing  to  do  that  ? 

Mr.  Lightfoot.  I would  say  that  I would  be  willing  personally  to 
be  of  any  service  I can  to  this  committee  in  trying  to  solve  this 
problem;  if  you  feel  you  must  report  a bill,  I will  be  very  glad  to  point 
out  any  objections  that  occur  to  my  mind,  if  that  is  the  desire  of  the 
committee.  I want  to  say,  however,  that  if  such  a bill  would  clear 
away  this  unrest  in  the  country  so  as  to  permit  the  packers  to  reach 
a point  where  they  can  meet  the  producers  of  this  country  and 
through  cooperation  work  out  something,  it  might  be  helpful  in  this 
matter. 

Mr.  Purnell.  Do  you  think  they  could  meet  through  an  agency 
created  in  the  Department  of  Agriculture  with  the  Secretary  at  the 
head  of  it? 

Mr.  Lightfoot.  I made  an  argument  at  your  last  hearing  in  the 
last  Congress,  at  the  request  of  the  committee,  in  which  I took  the 
position  that  if  you  were  going  to  have  regulation  of  any  kind,  it 
ought  to  be  in  the  Department  of  Agriculture,  for  the  reason  that  it 
now  exercises  general  supervision  over  a great  many  of  the  activities 
of  the  packing  industry,  and  the  legislation  would  coordinate  in  that 
department  all  of  the  authority  and  jurisdiction  that  should  be 
necessary  to  properly  supervise  it. 

Mr.  Purnell.  I believe  the  Secretary  of  Agriculture  would  be 
reasonable  and  that  a board  or  commission  created  within  that 
department  would  afford  a meeting  ground  for  these  two  forces  that 
ought  to  get  together. 


MEAT  PACKER. 


271 


Mr.  Lightfoot.  I say  to  you  that  in  any  bill  you  pass — if  you  ask 
my  opinion  personally,  some  of  them  might  differ  from  me,  I think 
some  of  the  packers  would — but  I say  from  my  study  of  the  situation 
that  would  be  the  logical  thing  to  do.  If  you  have  a bill,  give  him  the 
jurisdiction,  because  he  now  touches  the  industry  in  so  many  parts, 
starting  on  the  farms,  the  inspection  work  for  the  detection  of  tuber- 
culosis, and  follows  the  animals  on  to  the  stockyards.  Let  him  follow 
all  the  way  down. 

Mr.  Ten  Eyck.  Is  it  your  opinion  that  the  Capper-Yolstead  Act 
is  a step  in  the  right  direction  for  the  stabilization  of  the  price  of  beef 
products  ? 

Mr.  Lightfoot.  Yes,  sir;  I would  say  that  it  was  a step  in  the  right 
direction. 

Mr.  Ten  Eyck.  Under  cooperation  ? 

Mr.  Lightfoot.  Yes,  sir;  under  the  bill  to  authorize  associations  to 
be  organized  among  the  producers.  They  could  regulate,  under  the 
supervision  of  the  Secretary  of  Agriculture,  the  flow  of  live  animals 
to  the  market.  As  it  stands  at  present,  there  might  be  some  question 
under  the  Sherman  Act  if  they  undertook  to  limit  the  supplies  as  to 
whether  or  not  they  would  not  violate  the  Sherman  Act,  and  I think 
Representative  Gould,  of  this  Congress,  has  already  introduced  a 
resolution  to  investigate  the  extent  to  which  the  farmer  organizations 
are  now  cooperating  so  as  to  restrict  the  supply.  In  that  respect,  it 
might  be  held  to  violate  the  law.  If  we  are  to  stand  in  constant  dread 
of  the  law,  it  would  not  be  of  benefit  to  the  country  if  the  packers 
were  to  cooperate  in  order  to  prevent  gluts  in  the  market  and  great 
waste,  but  when  we  have  60,000  head  of  cattle  to-day  and  to-morrow 
we  have  10,000,  we  have  got  to  keep  a force  of  labor  employed,  and 
they  are  guaranteed  so  many  hours  a week  at  prices  fixed  during  the 
war — they  have  since  been  modified,  but  the  agreement  has  been 
renewed — you  may  have  seen  in  the  press  that  we  had  a conference 
with  the  Secretary  of  Labor  the  other  day — that  is  very  expensive. 
Suppose  they  could  regulate  the  flow  of  animals,  have  it  uniform,  for 
our  demand;  we  tried  to  do  that  in  one  instance  in  Kansas 

Mr.  Ten  Eyck.  In  other  words,  you  believe  in  cooperation  in 
storage  on  the  hoof  ? 

Mr.  Lightfoot.  Absolutely.  The  minute  you  kill  meat  you  have 
to  get  rid  of  it  in  a certain  time.  The  packers  would  welcome  a 
situation  where  these  things  could  be  cleared  up  so  that  the  public 
mind  could  look  at  the  packing  industry  as  a great  servant  of  the 
people,  serving  them  efficiently  and  economically,  providing  whole- 
some, fresh  food  in  every  part  of  this  country  three  times  a day  at  a 
cost  less  than  any  other  industrial  concern  in  the  country. 

Mr.  Kincheloe.  Do  you  think  that  reasonable  legislation  or  super- 
vision of  your  business,  such  as  proposed  in  the  pending  bill,  would  do 
more  toward  restoring  confidence  in  the  public  mind  in  your  business 
than  any  other  thing  ? 

Mr.  Lightfoot.  I think  it  would  go  a long  way,  provided  you  had 
a constructive  law — supervision  as  distinguished  from  regulation.  I 
think  there  is  a distinct  line  of  difference.  When  you  come  to  regula- 
tions and  you  set  up  the  authority  in  Washington,  it  is  going  to  inter- 
fere with  the  initiative  and  with  the  judgment  of  the  heads  of  these 
great  organizations  that  require  the  highest  kind  of  specialized  talent. 


272 


MEAT  PACKER. 


The  Chairman.  Mr.  Lightfoot,  what  do  you  think  of  the  suggestion 
made  by  Mr.  Clarke  ? There  would  be  no  embarrassment  in  conferring 
with  the  Secretary  of  Agriculture  ? 

Mr.  Lightfoot.  If  this  committee  requested  me 

The  Chairman  (interposing).  I do  not  think  that  the  committee 
would  take  the  responsibility  of  ordering  that  to  be  done. 

Mr.  Lightfoot.  Not  ordering  it. 

The  Chairman.  There  would  not  be  any  impropriety  in  the  in- 
terested parties  conferring  on  the  matter  ? 

Mr.  Lightfoot.  No.  If  the  gentlemen  will  suggest  it  to  me  and 
you  desire  me  to  do  so,  I will  be  glad  to  cooperate  in  any  way. 

Mr.  Clarke.  I suggested  that  they  confer  and  report  back  to  the 
committee.  I think  that  would  give  us  a definite  basis  to  go  on. 
At  present  we  are  not  leading  to  any  definite  result. 

Mr.  Ten  Eyck.  Take  their  suggestions  as  a foundation  and  go 
over  it  ? 

Mr.  Clarke.  Yes,  sir. 

Mr.  Thompson.  The  crux  of  your  argument  is  cooperation  ? 

Mr.  Lightfoot.  To  this  extent.  I think  that  the  real  difficulty, 
which  is  an  economic  one,  in  this  situation,  could  be  more  nearly 
solved  if  there  could  be  cooperation  between  the  producers  of  live 
stock  and  the  packers  and  another  element,  the  distributors,  should 
be  in  there.  If  there  was  cooperation  all  along  the  line 

Mr.  Thompson  (interposing).  That  would  be  your  main  suggestion 
in  a conference  with  the  Secretary,  would  it  ? 

Mr.  Lightfoot.  I would  be  very  glad  to  go  over  the  whole  subject 
with  him  from  beginning  to  end,  get  his  views  as  well  as  to  offer  our 
own,  hoping  that  out  of  the  conference  there  would  come  some 
suggestion  that  would  be  acceptable  to  the  committee. 

Mr.  Purnell.  Do  you  think  that  there  is  any  lost  motion  between 
the  producer  and  consumer  that  could  be  eliminated  by  legislation  ? 
You  must  recognize  one  thing,  the  public  mind  today  is  inflamed  and 
depressed  because  of  the  actual  conditions  existing  between  the  pro- 
ducer and  consumer— the  price  paid  and  received — I am  just  wonder- 
ing whether,  in  your  judgement,  any  report  that  this  committee 
might  make  and  any  legislation  which  Congress  might  pass  would 
tend  to  elimate  any  lost  motion  or  expense  in  the  middle ; that  is, 
adding  to  the  price  paid  by  the  consumer  and  subtracting  from  the 
price  paid  to  the  producer  ? 

Mr.  Lightfoot.  I think  so,  but  very  little  of  it  would  come  from 
legislation.  The  only  thing  is  to  make  it  possible  for  that  measure 
of  cooperation  between  these  different  branches  of  this  industry  so 
as  to  eliminate  this  waste  and  these  fluctuations  of  receipts.  If  I 
may  be  permitted — I do  not  want  to  take  too  much  of  your  time, 
but  I think  it  is  in  the  interest  of  clearing  this  thing  up.  The  larger 
packing  companies  are  condemned,  at  least,  their  position  in  the  mar- 
ket is  not  understood.  In  place  of  being  condemned  here  for  any 
percentage  they  might  buy  of  live  stock  on  the  markets,  why,  if  it 
were  not  for  the  five  big  packers,  the  markets  for  the  live  stock  in- 
dustry would  be  destroyed  in  a very  short  time  for  the  reason  that 
they  must  buy  everything  that  comes  on  the  hoof  in  the  market 
that  is  offered  for  sale  every  day.  They  must  clean  those  markets 
up.  Otherwise  the  next  day  or  two  days  afterwards  you  would  not 
have  any  place  to  receive  a head  of  live  stock  in  any  of  these  stock- 
yards — our  duty  is  to  buy  it. 


MEAT  PACKER. 


273 


Mr.  Voigt.  That  is  just  the  answer  to  the  contention  that  I have 
made  a number  of  times,  that  the  small  packer  can  not  absorb  the 
offerings  of  live  stock.  In  other  words,  your  people  consume  such 
an  enormous  percentage  that  you  can  control  the  business.  You 
say  that  you  want  a law  that  provides  for  supervision,  but  not 
regulation.  That  does  not  mean  anything,  that  is  just  another 
way  of  saying  it;  you  would  like  to  have  a law  giving  some  fellow 
the  right  to  look  at  you  but  who  can  not  tell  you  anything  ? 

Mr.  Ligiitfoot.  No;  you  misunderstood  what  I meant.  I say 
this.  If  the  packers  are  in  a combination  in  restraint  of  trade  or 
if  they  are  a monopoly  in  violation  of  the  Sherman  Act,  and  the  agency 
which  you  now  have  in  the  Federal  Trade  Commission  will  apply 
itself  to  this  industry,  it  will  find  whether  that  be  true  and  you  have 
the  machinery  now  to  prosecute.  Any  regulations  you  make  will 
not  cure  that.  If  your  new  agency  should  find  that  the  packers 
were  a monopoly  and  were  violating  the  law,  you  would  not  want 
them  simply  to  cease  and  desist.  If  you  got  irrefutable  proof 
of  the  fact  you  would  want  to  lay  those  facts  before  the  Attorney 
General  and  prosecute  them. 

Mr.  Voigt.  I will  tell  you  what  I think.  The  Attorney  General 
stated  before  this  committee  last  year  that  not  a single  business 
man  had  been  put  in  jail  under  the  antitrust  law.  We  all  know 
that  there  have  been  violations  of  the  law.  I think  a properly 
framed  bill  can  cause  some  supervisory  agency  to  make  certain 
orders  that  will  put  you  people  in  a position  where  you  can  not 
violate  the  law. 

Mr.  Lightfoot.  I do  not  think  so. 

Mr.  Voigt.  That  is  to  assume  that  any  order  that  would  be  made 
by  a governmental  agency  would  be  violated  ? 

Mr.  Lightfoot.  No,  sir.  I doubt  whether  it  is  really  profitable 
for  us  to  go  into  the  discussion  of  that  phase,  but  is  it  not  a fact 
that  any  law  you  write,  if  men  willfully  wish  to  violate  it,  they  can 
do  it?  The  evil  is  not,  as  I take  it,  from  your  position,  whether 
you  can  by  legislation  prevent  men  from  doing  it,  but  to  ascertain 
the  fact  as  to  whether  or  not  they  are  doing  it.  Then  you  have  the 
remedies  already  in  force,  more  than  the  committee  has  suggested 
in  any  of  these  bills.  Cease  and  desist,  would  be  the  extent  of  the 
powers  under  any  of  these  bills. 

Mr.  Voigt.  I will  be  very  frank  with  you.  I am  satisfied  from 
the  evidence  that  has  been  produced  before  this  committee  and 
from  the  Federal  Trade  Commission’s  report  that  you  men  have 
violated  the  law  and  that  you  have  been  and,  I think,  are  now  in 
combination.  The  Attorney  General  stated  to  this  committee  last 
year,  after  investigating  the  facts,  that  he  was  satisfied  that  you 
had  violated  the  law  and  were  subject  to  prosecution. 

Mr.  Lightfoot.  Yes,  sir. 

Mr.  Voigt.  I should  like  to  see  some  bill  written  that  will  prevent 
a continued  violation  of  the  spirit  of  that  law.  Now,  you,  and  I 
think  some  others,  have  stated  that  we  have  a law  so  that  if  you 
people  are  guilty  of  the  violation  of  the  law  that  you  can  be  prose- 
cuted ? 

Mr.  Lightfoot.  Yes,  sir. 

46985—21 18 


274 


MEAT  PACKER. 


Mr.  Voigt.  I want  to  be  frank  in  this  statement.  While  I do 
believe  that  you  are  violating  the  law,  I do  not  think  that  any  prose- 
cuting attorney  can  produce  enough  evidence  to  prove  a violation 
of  the  law  in  a criminal  proceeding.  That  is  my  position. 

Mr.  Lightfoot.  I will  answer  that  this  way.  Of  course,  as  to 
your  opinion,  you  are  entitled  to  its  conclusion,  which  has  sug- 
gested itself  to  your  mind  from  the  facts  as  you  think  they  exist 
or  as  you  have  read  this  evidence.  I would  not  deny  your  right 
to  do  so.  Being  more  intimately  connected  with  the  industry,  I 
say  to  you,  outside  of  the  fact  of  my  position  as  a representative  of 
the  industry,  that  there  is  no  truth  in  the  statement  that  there  is 
now  a combination  in  restraint  of  trade.  If  there  was,  I would 
not  represent  them. 

Mr.  Voigt.  If  you  men  did  not  voilate  the  law,  you  never  would 
have  gone  into  court  and  consented  to  the  decree  ? 

Mr.  Lightfoot.  That  is  what  I am  going  to  answer  just  for  your 
information  and  because  it  is  something  that  I think  should  be 
cleared  up.  I was  in  these  conferences  from  the  beginning.  They 
lasted  several  months.  I said  to  the  Attorney  General  of  the  United 
States,  if  there  was  to  be  a decree  entered  in  this  case  enjoining  the 
packers  from  continuing  in  the  grocery  business  or  their  ownership 
in  the  stockyards  or  using  their  distributing  system  for  distributing 
these  so-called  unrelated  lines  which  was  predicated  upon  any 
admission  that  we  had  violated  any  law  or  were  guilty  of  any  offense, 
that  the  negotiations  would  cease  then  and  there,  and  that  was 
maintained  all  the  way  through  this  entire  proceeding.  Further- 
more, in  the  stipulation  that  was  made  before  the  decree  was  en- 
tered there  is  the  express  language  which  I will  ask  you  to  read,  if 
you  have  not  done  it : 

The  entry  of  this  decree  and  the  consent  to  its  provisions  shall  not  he  construed  as 
an  adjudication  of  the  truth  of  any  fact  alleged  in  the  complaint  to  be  filed  by  the  At- 
torney General  in  the  case  or  as  an  admission  of  guilt  on  any  charge  he  might  make. 

Mr.  Voigt.  You  are  really  in  the  position  of  the  man  who  comes 
into  court  and  says,  “I  am  not  guilty,  I have  not  done  anything, 
but  I have  no  objection  to  the  court  holding  me  guilty.  ” Is  not 
that  the  situation,  you  consented  to  be  found  guilty  ? 

Mr.  Lightfoot.  I believe  that  nine-tenths  of  the  people  would 
believe  the  same  thing  by  reason  of  that  fact.  That  is  the  unfortu- 
nate part  of  it.  Because  the  packers,  in  good  faith,  have  tried  to 
meet  public  opinion  created  by  the  charges  of  the  Federal  Trade 
Commission  and  these  bills  before  Congress,  that  we  were  undertak- 
ing to  monopolize  the  breakfast  table  of  the  American  people.  The 
packers  had  no  such  intention.  They  desired  no  such  advantage 
and  they  could  not  get  it  if  they  had  desired  it.  In  order  to  meet 
public  sentiment  on  that  score,  we  thought  by  making  it  impossible 
for  us  to  continue  in  this  business,  to  give  it  up,  would  satisfy  the 
public  mind.  I think  it  is  true,  that  nine-tenths  of  the  people  in 
this  country  have  the  impression  that  exists  in  your  mind  in  relation 
to  this  industry;  that  is,  “if  you  had  not  been  guilty,  you  would  not 
have  done  it.  ” I say  to  you,  in  all  sincerity,  that  no  such  motive 
ever  actuated  us  in  doing  it,  and  if  it  had  been  required  that  we 
admit  guilt  we  would  not  have  consented  to  the  decree. 

Furthermore,  you  can  not  blame  the  Attorney  General.  I am  not 
criticizing  his  position.  Perhaps,  the  Attorney  General  believed 


MEAT  PACKER. 


275 


that  he  had  evidence  enough,  I do  not  know  what  was  in  his  mind 
on  that,  whether  he  did  believe  it  or  not.  From  our  standpoint 
there  were  no  facts,  and  other  Attorneys  General  passed  on  those 
facts,  too,  and  no  indictment  was  ever  brought.  I do  not  think 
that  there  is  sufficient  proof  in  this  record  anywhere,  that  would  be 
acceptable  to  any  court,  to  show  that  the  packers  had  any  mo- 
nopoly as  charged. 

I want  to  call  your  attention  to  this  one  thing  in  closing.  Senator 
Smoot  made  a speech  in  the  Senate  on  the  24th  day  of  January  in 
which  he  analyzed  the  charges  of  the  Federal  Trade  Commission. 
There  are  only  four  fundamental  circumstances  in  their  whole  report 
offered  in  support  of  their  charges.  There  is  no  affirmative  proof 
that  there  was  any  monopoly.  The  circumstances  presented  by  the 
commission  were  that  we  divided  purchases  of  cattle  on  a percentage 
basis,  that  we  had  an  agreement  on  foreign  business,  that  we  had 
agreements  to  fix  the  price  of  unrelated  lines,  and  that  we  contributed 
to  joint  funds.  They  are  completely  analyzed  in  the  speech  of 
Senator  Smoot  on  the  24th  of  January.  If  you  gentlemen  will  read 
it  you  will  find  how  much  legal  evidence  there  is  in  that  Federal 
Trade  Commission’s  report  to  support  the  charge  that  the  packers 
were  guilty  of  monopoly  or  in  restraint  of  trade. 

Mr.  Voigt.  Any  one  who  reads  that  speech  ought  to  read  in  con- 
nection with  it  the  so-called  “ black  book”  which  you  will  find  at 
page  213  of  Part  II  of  the  Federal  Trade  Commission  report. 

Mr.  Gernerd.  On  what  page  did  you  say,  Mr.  Voigt? 

Mr.  Voigt.  On  page  213  of  Part  II  of  the  Federal  Trade  Commis- 
sion’s report.  That  is  the  record  kept  by  one  of  the  packers. 

Mr.  Lightfoot.  I would  be  glad  to  have  them  read  the  whole 
record.  If  they  find  time  I would  be  glad  to  have  them  read  the 
whole  Federal  Trade  Commission  report  and  read  this  speech  in  con- 
nection with  it.  I am  perfectly  willing  to  take  their  Judgment  after 
that. 

I want  to  ask  the  pardon  of  this  committee  for  this  intrusion.  I 
merely  wanted  to  answer  Mr.  Tincher  on  the  proposition  of  the  so- 
called  National  Packing  Co.,  that  it  was  not  a corporation  in  re- 
straint of  trade. 

I have  stated  that  I will  take  up  the  matter  and  see  what  we  can 
do  in  relation  to  making  some  suggestions  to  the  committee. 

The  Chairman.  We  might  get  together  on  one  proposition,  and  if 
we  can  agree  on  that,  the  question  then  would  be  what  the  legislation 
should  be. 

Mr.  Lightfoot.  Yes,  sir. 

The  Chairman.  It  has  been  thought  by  the  members  of  the  com- 
mittee that  we  should  not  hold  as  extensive  hearings  as  we  did  in  the 
last  Congress  and  other  Congresses,  and  if  it  is  agreeable  to  the  com- 
mittee we  might  adopt  a resolution  of  this  kind : 

Moved  that  the  testimony  given  in  the  following  congressional  hearings  be  con- 
sidered a part  of  the  present  hearings  to  the  same  intent  and  effect  as  though  intro- 
duced in  these  hearings: 

Before  the  Subcommittee  on  Agriculture  and  Forestry,  United  States  Senate, 
Sixty-fifth  Congress,  second  session,  from  September  17  to  28,  1918,  on  Senate  reso- 
lution 221. 

Before  the  Committee  on  Interstate  and  Foreign  Commerce,  House  of  Representa- 
tives, Sixty-fifth  Congress,  third  session,  commencing  December  19,  1918,  and  closing 
in  February,  1919,  on  H.  R.  13324. 


276 


MEAT  PACKER. 


Before  the  Committee  on  Agriculture  and  Forestry,  United  States  Senate,  Sixty- 
fifth  Congress,  third  session,  on  S.  5305,  commencing  January  13,  1919,  and  ending 
February  13,  1919. 

Before  Subcommittee  of  the  Committee  on  the  District  of  Columbia,  United  States 
Senate,  Sixty-sixth  Congress,  July,  August,  and  September,  1919,  on  Senate  resolu- 
tion 150,  “High  Cost  of  Living  in  the  District  of  Columbia.” 

Before  Committee  on  Agriculture  and  Forestry,  United  States  Senate,  Sixty-sixth 
Congress,  first  session,  on  S.  2199  and  S.  2202,  commencing  August  18  and  ending 
September  13,  1919;  also  held  again  in  January,  1920. 

Joint  hearings  before  the  Committees  on  Agriculture,  Congress  of  the  United  States, 
Sixty-sixth  Congress,  first  session,  on  S.  2199  and  S.  2202,  held  on  September  25,  1919. 

Before  Committee  on  Agriculture,  House  of  Representatives,  Sixty-sixth  Congress, 
second  session,  on  meat-packer  legislation,  commencing  February  24,  1920,  and 
ending  in  April,  1920. 

Before  Committee  on  Agriculture,  House  of  Representatives,  Sixty-sixth  Congress, 
second  session,  on  meat-packer  legislation,  held  January  3,  1921. 

Mr.  Kincheloe.  Including  the  last  hearings? 

The  Chairman.  Yes,  sir. 

Without  objection  it  will  be  so  ordered. 

(There  was  no  objection.) 

Mr.  McLaughlin  of  Nebraska.  With  reference  to  the  suggestion  of 
Mr.  Clarke,  Gen.  Lightfoot  or  anybody  else,  I take  it,  any  other  per- 
son here,  or  any  person  who  is  not  here,  who  wants  to  confer  with  the 
Secretary  and  make  suggestions  as  to  amendments  to  any  of  the 
present  bills  will  have  a right  to  do  so,  and  will  submit  the  new  bill 
for  the  consideration  of  this  committee.  I am  in  thorough  accord 
with  that  and  I assume  every  other  member  of  the  committee  under- 
stands it,  but  I want  every  man  in  this  room  to  understand,  and  I 
want  the  public  to  understand,  that  before  this  committee  reports 
out  a bill  the  committee  considers  it  carefully  for  amendment,  it 
considers  it  very,  very  carefully,  and  that  we  are  not  inviting  any 
packers’  attorney  or  anybody  else  to  write  a bill  for  this  committee. 

Mr.  Clarke.  That  was  not  the  idea  at  all. 

Mr.  Thompson.  If  there  are  any  suggestions  along  that  line  the 
'suggestions  should  be  made  to  this  committee,  which  is  going  to 
bring  out  the  bill,  and  not  to  the  Secretary  of  Agriculture. 

The  Chairman.  As  I understand  the  suggestion,  it  was  that  they 
meet  and  confer,  and  possibly  come  to  an  agreement  as  to  some 
provisions  of  the  bill. 

Mr.  Clarke.  That  is  it,  and  to  make  their  recommendations  to 
this  committee  and  let  the  members  of  the  committee  thrash  them 
out  themselves. 

The  Chairman.  In  other  words,  the  committee  would  have  the 
benefit  of  their  suggestions.  We  will,  of  course,  write  our  own  bill. 

Mr.  McLaughlin  of  Nebraska.  I think  the  committee  would  be 
pleased  to  have  the  suggestions. 

Mr.  Kincheloe.  I think  any  suggestions  which  they  might  have 
to  offer  as  to  the  bill  should  be  submitted  to  this  committee.  So  far 
as  I am  concerned  individually,  I will  reserve  my  own  opinion  as  to 
the  question  of  the  decree. 

Mr.  Thompson.  I do  not  want  any  outside  influence  writing  any 
bill  for  this  committee,  either  officially  or  otherwise, 

Mr.  McLaughlin  of  Nebraska.  If  I may  ask  Gen.  Ryan  a ques- 
tion, Mr.  Chairman? 

Mr.  Ryan.  I though  I had  been  forgotten. 

The  Chairman.  Certainly. 

Mr.  McLaughlin  of  Nebraska.  With  reference  to  the  suggestion  of 
Congressman  Tincher,  will  you  please  have  the  Institute  of  American 


MEAT  PACKER. 


277 


Packers,  either  through  one  of  their  officers  or  representatives  or  by 
printed  statement,  furnish  to  this  committee  a statement  of  their 
receipts  and  disbursements  for  a period  of  time,  say,  one  year  or 
less  ? I wish,  if  it  will  not  be  asking  too  much,  that  you,  as  a member 
of  the  institute,  one  of  the  members,  endeavor  to  get  that  for  us  ? 

Mr.  Ryan.  Yes,  sir. 

Mr.  McLaughlin  of  Nebraska.  I should  like  to  have  it  in  plain 
language  that  we  can  understand. 

Mr.  Ryan.  Yes,  sir. 

Mr.  McLaughlin  of  Nebraska.  I just  want  to  call  your  attention 
in  this  connection  to  the  Veeder  pool  that  was  talked  of.  This  is  just 
one,  there  may  be  a good  many  instances  of  this  kind  in  the  record, 
but  I want  to  call  your  attention  to  this  letter  from  Mr.  Veeder  to 
Mr.  Traynor,  the  assistant  to  Louis  F.  Swift,  under  date  of  August 
23,  1916,  in  which  Mr.  Veeder  says: 

Mr.  W.  B.  Traynor, 

Care  Swift  & Co.,  Chicago. 

Bear  Sir:  You  asked  me  the  other  day  for  certain  percentages  which  are  generally 
known  as  “ usual  percentages.”  On  July  30,  1913,  LFS,  A M,  and  TEW  agreed 
with  C and  S & S upon  the  following  percentages  to  cover  general  legislative  and 
litigation  matters:  S,  so  much;  A,  so  much;  M,  so  much;  C,  so  much;  and  S & S, 
83  much. 

We  find  that  the  Federal  Trade  Commission  has  concluded  that 
that  was  a code  meaning  certain  figures.  We  do  not  want  a code. 
We  want  the  names  of  the  contributors  and  we  want  to  know  what 
they  spend  their  money  for. 

Mr.  Ryan.  Yes,  sir. 

Mr.  McLaughlin  of  Nebraska.  Thank  you. 

The  Chairman.  Have  you  concluded  your  statement,  Mr.  Ryan  ? 

Mr.  Ryan.  Yes,  sir. 

The  Chairman.  We  are  much  obliged  to  you,  Mr.  Ryan. 

Mr.  Ryan.  I am  very  happy  to  have  come  here  to  meet  you. 
It  is  a long  journey,  but  nevertheless  I have  been  well  paid,  because 
I feel  that  the  disposition  of  this  committee  is  to  be  fair  and  friendly 
to  the  packers  of  the  country.  We  will  cooperate  with  you  all  we 
can.  The  proposition  to  ask  for  suggestions  from  the  packers  when 
you  are  formulating  the  bill  is  a splendid  one,  and  the  packers  will 
give  you  the  very  best  we  have.  If  there  is  any  legislation  necessary — 
I hope  to  the  good  Lord  you  will  not  have  it 

The  Chairman  (interposing) . I think  it  is  absolutely  fair  that  any- 
body feel  free  to  offer  suggestions.  I do  not  think  any  committee 
would  want  to  go  on  record  that  they  had  denied  anybody  the  right 
to  submit  suggestions  or  any  information. 

Mr.  Kincheloe.  I wish  we  could  have  some  suggestions  from  the 
consumers  and  producers. 

The  Chairman.  They  have  been  notified  and  they  will  have  an 
opportunity  to  appear,  and  others  are  to  appear.  We  want  the  sug- 
gestions as  well  as  the  testimony  of  everybody  who  has  any  interest 
in  this  matter. 

How  many  witnesses  have  you  for  this  afternoon  ? 

Mr.  Creigh.  Our  program  is  a little  out  of  gear,  but  we  have  at 
least  five  others  that  we  should  like  to  go  on. 

The  Chairman.  How  would  it  do  if  we  took  a recess  until  2 ’clock  ? 

Mr.  Creigh.  That  would  be  satisfactory. 


278 


MEAT  PACKER. 


The  Chairman.  Then,  without  objection,  the  committee  will  take 
a recess  until  2 o’clock  this  afternoon. 

(Thereupon,  the  committee  took  a recess  until  2 o’clock  p.  m.) 

AFTER  RECESS. 

The  committee  reconvened  at  2.20  o’clock  p.  m.,  pursuant  to  recess, 
Hon.  Gilbert  N.  Haugen  (chairman)  presiding. 

The  Chairman.  The  committee  will  come  to  order.  Who  is  the 
next  witness  ? 

Mr.  Creigh.  Mr.  Brown,  the  chairman  of  the  National  Live  Stock 
Exchange. 

The  Chairman.  We  will  be  pleased  to  hear  from  you,  Mr.  Brown. 

Mr.  Creigh.  Might  I say,  Mr.  Chairman,  that  we  have  probably  six 
witnesses  who  will  wish  to  get  on  this  afternoon,  and  each  of  them  will 
probably  make  as  compact  a statement  as  he  can,  but  I don’t  want 
to  sidetrack  any  questions  or  any  discussion;  that  really  was  helpful 
this  morning,  I thought,  in  bringing  us  closer  together;  but  if  you  will 
help  us  a little  bit  this  way  we  will  try  to  help  you. 

The  Chairman.  It  is  in  your  hands.  The  time  is  yours.  Now,  we 
will  hear  you,  Mr.  Brown. 

STATEMENT  OF  EVERETT  C.  BROWN,  CHAIRMAN  OF  THE 

NATIONAL  LIVE  STOCK  EXCHANGE,  UNION  STOCKYARDS, 

CHICAGO,  ILL. 

The  Chairman.  Will  you  give  your  name  ? 

Mr.  Brown.  Everett  C.  Brown.  I am  chairman  of  the  National 
Live  Stock  Exchange,  Chicago. 

The  Chairman.  Proceed  with  your  statement,  Mr.  Brown. 

Mr.  Brown.  Mr.  Chairman  and  gentlemen,  this  morning  in  looking 
over  the  committee — and  I have  been  coming  before  this  committee 
for  four  or  five  years  on  different  legislation — it  seemed  to  me  that  I 
saw  quite  a number  of  new  faces.  It  has  occurred  to  me  that  some, 
and  perhaps  most  of  the  committee,  are  not  thoroughly  conversant 
with  the  particular  functions  of  the  commission  man  and  the  live- 
stock exchange.  I made  quite  a voluminous  statement  on  the 
exchange  question  in  the  Anderson  bill.  I don’t  propose  to  read 
that  now,  because  it  is  too  long,  but  there  is  a definition  of  commission 
men  here,  and  the  construction  of  exchanges  that  I think  should  be 
read  into  this  record,  and  if  you  will  permit  me  to  do  so,  I will  start 
with  that. 

The  Chairman.  Do  you  mean  the  testimony  given  on  the  Anderson 
bid  ? 

Mr.  Brown.  This  testimony  was  submitted  in  the  Anderson  bill. 
But  I wanted  to  call  the  particular  attention  of  the  committee  to  the 
functions  of  live-stock  commission  men  and  exchanges,  which  are  the 
organizations  of  commission  men. 

First  of  all,  to  describe  the  live-stock  commission  men: 

The  live-stock  commission  men  selling  live  stock  at  the  open  markets  throughout 
the  country  act  as  the  personal  agent  or  representative  of  the  live-stock  producers. 
They  perhaps  perform  more  actual  labor  in  connection  with  the  handling  of  live 
stock  shipments  than  is  the  case  with  any  other  commodity  marketed.  As  statistics 
show,  the  small  sums  paid  them  for  commission — 


MEAT  PACKER. 


279 


which,  I may  interpolate  there,  have  not  averaged  one-half  of  1 per 
cent  for  the  last  five  years — 

represents  the  lowest  commission  on  any  commodity  sold  through  brokers  or  com- 
mission men  on  which  a brokerage  fee  or  commission  charge  is  fixed.  The  commis- 
sion man  must  furnish  his  patrons  with  personal  market-advice  letters  and  subscribe, 
at  his  expense,  to  market  papers  furnished  gratis  to  such  patrons.  The  incoming 
shipments  must  be  traced  to  insure  prompt  delivery,  and  after  arrival  the  shipments 
are  unloaded,  sorted,  yarded,  fed,  and  watered  before  being  offered  for  sale,  so  that 
they  will  present  the  best  possible  appearance.  After  negotiating  with  the  various 
competitive  buyers,  the  stock  is  weighed  up,  amount  of  sale  collected,  and  remitted 
to  the  customer,  and  where  the  animals  are  to  be  reshipped  cars  must  be  ordered  for 
loading  and  the  stock  delivered  to  the  loading  pens  from  the  sales  division,  and  when 
cars  are  placed  the  commission  map  assists  in  the  loading  service. 

Every  sale  made  by  a commission  man  carries  with  it  his  unqualified  guaranty  of 
title.  Thousands  of  dollars  are  lost  by  these  concerns  each  year  through  the  sale  of 
mortgaged  stock,  but,  regardless  of  this  fact,  the  commission  man  protects  the  buyer, 
who  need  have  no  fear  of  the  title. 

As  to  the  functions  of  the  exchange — and  there  are  27  live-stock 
exchanges  in  the  United  States,  and  I have  been  honored  by  being 
selected  as  the  president  of  the  national  body — I would  like  to  read 
what  the  work  of  the  exchanges  has  meant  since  their  existence, 
which  began  about  37  years  ago. 

This  is  from  my  statement  before  the  Committee  on  Agriculture  in 
the  Anderson  bill. 

Among  the  work  undertaken  by  the  live-stock  exchanges  may  be  mentioned  the 
following: 

1.  Adoption  and  enforcement  of  rigid  rules  and  severe  penalties,  thus  forcing  out 
unfair  and  unscrupulous  dealers. 

2.  Adoption  and  enforcement  of  rules  prohibiting  cruelty  to  or  beating  of  animals 
marketed,  thus  avoiding  losses  by  reason  of  bruised  or  crippled  animals. 

3.  Adoption  of  trading  rules  governing  marketing  transactions,  thus  assuring  a clear 
title  to  live  stock  sold,  making  the  commission  man  personally  responsible  for  sales 
made. 

4.  Adoption  of  rules  which  permit  every  ovner  to  sell  his  own  stock  vhen  desired, 
or  to  go  upon  the  market  for  the  purpose  of  buying  such  stock  as  he  needs,  thus  pre- 
venting any  possible  discrimination  or  monopoly. 

5.  Adoption  and  enforement  of  rules  preventing  and  forbidding  favoritism  to  ship- 
pers, so  that  the  small  shipper  is  accorded  the  same  privileges  and  enjoys  the  same 
benefits  as  the  larger  ones. 

6.  Adoption  and  enforcement  of  rules  forbidding  the  sale  of  stock  from  one  member 
to  another  of  the  same  firm,  for  the  purpose  of  depriving  market  patrons  of  the  full 
selling  price. 

7.  Maintenance  of  a court  of  appeals,  to  which  any  patron  may  apply  without  ex- 
pense to  himself  or  without  requiring  attorneys,  the  committee  affording  justice  to 
all  concerned  after  a full  and  complete  hearing. 

8.  Adoption  of  rules  establishing  and  supervising  the  dockage  on  hogs,  which  rules 
have  effected  a saving  of  millions  of  dollars  for  shippers  by  doing  away  with  the  former 
ruinous  and  unfair  methods,  and  thus  forbidding  the  buyer  to  dock  as  he  deems  best. 

9.  By  providing  a central  office  for  handling  general  matters  duplication  of  expenses 
is  avoided,  and  economies  are  effected  to  the  benefit  of  both  patrons  and  commission 
concerns. 

10.  The  local  and  national  exchanges  have  instituted  or  intervened  in  every  case 
before  the  Interstate  Commerce  Commission  in  recent  years  in  assisting  the  live-stock 
shippers  to  obtain  fair  and  proper  rate  adjustments,  and  have  thus  succeeded  in 
saving  thousands  of  dollars  for  such  shippers  without  additional  profit  to  themselves. 

11.  Appointment  of  special  committees  who  constantly  strive  for  improved  train 
service  to  and  from  all  markets,  and  this  committee  may  be  credited  with  having 
participated  in  every  important  improvement  in  train  service  to  the  open  markets. 

12.  By  subjecting  all  transactions  to  the  scrutiny  of  appointed  committees  ques- 
tionable methods  are  reduced  to  a minimum  and  transgressors  are  brought  to  justice 
in  a manner  calculated  to  discourage  repetition. 

13.  By  keeping  in  touch  with  proposed  legislative  matters,  state  and  national,  the 
exchange  endeavors  to  encourage  legislation  of  a remedial  character  for  the  purpose 
of  advancing,  promoting,  and  protecting  the  live  stock  industry. 


280 


MEAT  PACKER. 


14.  By  establishment  of  rules  controlling  soliciting  they  have  done  away  with  the 
former  practice  of  inexperienced  solicitors  misrepresenting  market  conditions,  the 
rules  requiring  that  solicitors  shall  spend  sufficient  time  in  the  markets  to  familiarize 
themselves  with  acutal  conditions. 

15.  The  establishment  and  enforcement  of  uniform  commission  charges  on  the 
lowest  possible  basis  prevents  discrimination  between  large  and  small  shippers  and 
eliminates  temptation,  present  under  the  old  practice,  whereby  little  or  no  commis- 
sion would  be  charged,  but  where  returns  were  not  always  made  in  full. 

16.  The  establishment  of  claims  bureaus,  where  the  shipper  may  have  any  legiti- 
mate claim  against  the  railroads  handled  at  a minimum  of  cost.  Such  bureaus  are 
designed  to  prevent  the  filing  of  unfair  claims. 

17.  By  investigating  the  character  of  members  prior  to  their  admittance  to  the 
exchange,  the  personal  standing  is  of  the  highest,  as  only  men  of  good,  solid  business 
integrity  and  unquestionable  financial  responsibility  are  admitted,  and  by  the  same 
token  ail  crooked  or  dishonest  applicants  are  denied  admission. 

18.  By  the  concerted  action  of  the  commission  men,  packers  were  prevented  from 
buying  animals  subject  to  post-mortem  examination,  this  same  action  preventing  a 
destruction  of  the  great  cash  market  and  the  substitution  of  a credit  market  in  lieu 
thereof. 

19.  Having  forbidden  or  prevented  unfair  post-mortem  rule,  the  commission  men 
are  now  spending  thousands  of  dollars  in  a national  campaign  for  the  eradication  of 
diseases. 

20.  The  enforcement  of  the  marketing  rules  places  the  marketing  of  live  stock  upon 
a higher  place  than  that  of  any  other  commodity.  Every  sale  is  an  actual  sale  and 
every  transaction  is  a sale  for  cash,  the  proceeds  returning  to  the  shipper  on  the  date 
of  the  sale.  At  the  larger  markets  cash  sales  of  from  one  to  two  million  dollars  are 
made  daily. 

21.  The  gradual  evolution  of  marketing  conditions  under  the  guidance  and  super- 
vision of  live-stock  exchanges  has  resulted  in  such  marked  and  beneficial  changes  in 
conditions  that  the  market  patrons  rarely  deem  it  necessary  to  accompany  their 
shipments  to  market  except-  where  other  business  is  to  be  transacted  after  their  arrival 
there. 

22.  The  National  Live  Stock  Exchange  in  conjunction  with  local  exchanges  and 
other  organizations  are  now  engaged  in  a campaign  to  lessen  the  tremendous  shipping 
losses  now  prevalent.  It  is  estimated  that  the  result  of  this  campaign  will  be  millions 
of  dollars  saved  to  the  producers  and  millions  of  pounds  of  foodstuff  saved  for  a hungry 
world. 

23.  The  commission  men  originated  and  have  perpetuated  the  present  great  system 
of  cash  marketing  of  live  stock.  No  other  produce  of  the  farm  is  disposed  of  iu  this 
manner,  and  no  marketing  system  in  the  world  compares  with  our  American  live- 
stock marketing  scheme. 

Now,  I wish  to  make  a brief  statement,  gentlemen,  and  after  that 
I will  be  glad  to  answer  any  questions  that  you  care  to  ask. 

It  seems  to  me,  gentlemen,  that  the  time  has  come  for  plain  speaking, 
and  I purpose  bringing  to  your  attention  some  facts  which  merit 
your  most  careful  thought  and  consideration.  The  people  of  this 
country  have  been  hoodwinked  long  enough,  and  it  is  high  time  they 
were  informed  on  certain  phases  of  this  tremendous  problem. 

Just  what  do  we  really  want  and  what  do  we  hope  to  accomplish 
by  the  enactment  of  any  or  all  of  these  bills  into  law  ? Has  the  time 
come  when  we  can  by  legislative  action  set  aside  the  laws  of  supply 
and  demand  and  provide  a solution  for  the  problems  of  both  pro- 
ducers and  consumers? 

I do  not  think  there  is  a man  on  the  Agricultural  Committee  of 
either  the  Senate  or  the  House  that  believes  for  an  instant  that 
control  by  a live-stock  commission,  by  a Federal  trade  commission, 
by  the  Interstate  Commerce  Commission,  or  by  the  Department  of 
Agriculture  would  be  anything  more  or  less  than  a joke.  They  do 
not  make  men  capable  of  ever  getting  to  first  base  in  even  under- 
standing, to  say  nothing  of  controlling,  the  various  branches  of  the 
live-stock  industry.  Even  the  urgencies  of  the  war  and  its  difficult 
activities  did  not  bring  out  any  superman  capable  of  occupying  a 


MEAT  PACKER. 


281 


place  and  serving  the  Government  on  any  commission  such  as  is 
proposed. 

Congress  passed  the  Lever  law;  the  live-stock  industry  worked 
under  it  for  nearly  three  years.  There  never  has  been  a greater  joke 
legislation  that  was  taken  more  seriously  than  the  Lever  bill.  It 
did  not  control  anything,  and  the  Bureau  of  Markets  that  had  super- 
vision of  the  live-stock  industry  can  scarcely  show  any  real,  construc- 
tive benefits  to  any  branch  of  the  trade  after  having  been  given 
fully  as  complete  control  as  proposed  in  these  bills.  The  Bureau  of 
Markets  never  understood  the  law  themselves,  the  live-stock  industry 
never  understood  it,  and  finally  the  Supreme  Court  of  the  United 
States  declared  it  unconstitutional  and  Congress  annulled  the  act, 
and  I can  assure  you  gentlemen  that  this  is  what  is  going  to  happen 
if  this  kind  of  legislation  is  going  to  be  passed  by  Congress.  It  is 
humanly  impossible  to  make  it  operative. 

I have  personally  talked  with  some  of  the  largest  live-stock  feeders, 
shippers,  and  producers  within  the  last  two  weeks  and  have  heard 
the  bitterest  comments  on  this  proposed  legislation.  Nearly  all  of 
the  shippers  now  are  attributing  as  one  reason  for  prevailing  low 
prices  the  constant  agitation  that  has  been  going  on  for  three  or  four 
years  in  this  form  of  legislation,  and  an  expression  that  is  common 
all  over  the  West  is  that  the  walking  delegates  and  agitators  and 
high-salaried  farm  leaders  are  doing  more  by  their  agitation  to  pre- 
vent the  consumption  of  meat  foods  alone  than  all  the  good  they 
could  do  in  a hundred  years  by  their  “ tearing  down”  tactics,  and 
there  is  a feeling  prevalent  among  producers  all  over  the  country 
that  the  bitter  attacks  made  by  the  Federal  Trade  Commission  and 
by  self-constituted  associations  claiming  to  represent  certain  branches 
of  the  producers,  have  practically  caused  a cataclysm  in  prices  of  all 
kinds  of  live  stock  and  its  products. 

You  gentlemen  all  know  that  the  wool  growers  have  lost  hundreds 
of  millions  of  dollars  and  that  their  wool  is  almost  unsalable.  You 
also  know  that  the  attacks  by  the  Federal  Trade  Commission  on  the 
packers  have  been  believed  by  the  foreign  buyers  to  such  an  extent 
that  American  meats  are  discriminated  against,  and  this  directly 
reflects  great  losses  upon  the  producers  of  America. 

The  live-stock  commission  interests  in  the  27  live-stock  markets 
of  the  country,  through  cattle  and  sheep  loans  to  formerly  good 
customers,  have  lost  millions  of  dollars,  and  it  has  been  said  on  good 
authority  that  the  packers  have  lost  more  money  during  the  last  18 
months  than  they  made  during  the  entire  war,  as  they  were  caught 
with  high-priced  meat  that  they  could  not  sell  in  foreign  markets 
largely  because  of  the  fact  that  they  were  discredited  by  a bureau 
of  the  United  States  Government. 

I read  nothing  in  the  proposed  legislation  in  any  bill  that  in  any 
way  tries  to  control  what  everybody  in  this  room  knows  to  be  the 
greatest  profiteers — not  only  during  the  war  but  during  the  present 
time — that  this  country  has  ever  known.  Why  does  not  Congress 
try  to  control  these  people  who  by  their  retail  butchers’  associations 
in  the  large  distributing  cities  of  America  have  as  close  or  closer 
organization  than  any  of  the  big  trade-union  organizations  in 
America  ? 

Governmental  figures  will  show  you  gentlemen  conclusive^  that 
wholesale  meat  prices  have  followed  the  downward  trend  of  live- 


282 


MEAT  PACKER. 


stock  prices  so  that  to-day  the  retailer  can  and  does  buy  his  meats 
at  wholesale  at  practically  prewar  prices.  Have  any  of  you  gentle- 
men been  able  to  buy  your  meats  at  retail  at  prices  anywhere  near 
the  prewar  basis  ? 

Obviously  not,  and  one  would  think  from  the  prices  asked  by 
some  stores  that  not  only  did  a meat  famine  exist,  but  that  the  war 
was  on  in  full  swing,  with  all  sources  of  supply  shut  off,  and  only  a 
few  carcasses  available  for  distribution. 

There  is  no  more  justification  for  the  prices  asked  by  many  re- 
tailers of  meat  than  there  would  be  for  an  autocratic  form  of  govern- 
ment in  America.  Not  only  do  they  follow  the  rule  of  charging  all 
the  traffic  will  bear,  but  they  have  thrown  reason  to  the  winds  and 
are  slowly  driving  the  greatest  meat  eaters  in  the  world  to  a diet  of 
predigested  foods  heretofore  reserved  for  domestic  animals  and 
invalids. 

Domestic  consumption  of  meat  is  rapdily  declining  and  it  is  small 
wonder  that  this  is  the  case.  Give  the  live-stock  industry  its  per 
capita  consumption  of  a decade  ago  applied  to  our  present  popula- 
tion, and  the  increase  in  meat  consumption  would  amount  to  over 
a billion  pounds.  This  tremendous  decrease  in  the  consumption  of 
meats  reacts  directly  upon  the  farmer  and  live  stock  producer,  and 
as  the  bulk  of  the  grain  raised  in  the  United  States  is  fed  to  live 
stock  the  depression  caused  among  the  farmers  at  the  present  time 
by  this  stagnation  of  the  meat  industry  is  in  my  opinion  the  chief 
cause  for  the  depression  among  the  farmers  to-day. 

One  of  the  greatest  difficulties  confronting  the  producer  to-day 
is  his  inability  to  secure  from  any  source  whatsoever  sufficient  funds 
with  which  to  carry  on  his  business  of  buying  cattle  and  hogs  and 
making  meat  for  the  consumers  of  this  country.  Your  honorable 
committee  is  doubtless  aware  that  a very  great  proportion  of  the 
live  stock  raising  to-day  is  carried  on  with  borrowed  capital.  As  I 
have  told  previous  committees,  the  commission  men  of  the  United 
States  indorse  paper  annually  to  the  extent  of  fully  $50,000,000  to 
help  the  producers  make  this  meat  food.  The  live-stock  exchanges 
of  the  country  are  doing  their  utmost  at  this  time  to  induce  the 
Federal  Reserve  Board  to  loan  from  its  profits  the  sum  of  $50,000,000 
to  $100,000,000  to  help  the  producer  borrow  sufficient  money  to 
carry  on  his  live  stock  feeding.  I do  not  recommend  through  the 
proper  channels,  either  by  enacted  legislation  or  recommendation, 
that  the  farmer  and  the  live  stock  producer  who  has  suffered  such 
terrible  losses  in  the  recent  readjustment  of  prices,  that  he  be  financed 
on  the  conservative  lines  suggested  and  I honestly  fear  that  if  some- 
thing of  this  nature  is  not  done  to  finance  the  producer  there  will  be 
a great  many  farmers  forced  out  of  business  in  the  United  States 
and  the  reaction  will  be  a scarcity  of  meat  and  prohibitive  prices. 

In  analyzing  these  bills  we  commission  men,  of  the  live-stock  ex- 
changes, find  in  one  bill  that  we  are  to  be  placed  under  a live-stock 
commisison;  in  another  bill,  I believe,  under  a Federal  trade  commis- 
sion; in  another  bill,  the  Interstate  Commerce  Commission;  and  in 
still  another,  the  Department  of  Agriculture.  While  there  is  not  a 
commission  man  in  the  United  States  who  wants  to  go  under  any  bill, 
we  believe  that  the  safest  and  sanest  commission  that  has  been  pro- 
posed for  us  to  go  under  is  the  Interstate  Commerce  Commission, 
and  I am  instructed  by  our  exchanges  to  indicate  to  your  honorable 


MEAT  PACKER. 


283 


body  that  if  in  your  wisdom  any  legislation  finally  passes  the  Congress 
that  the  live-stock  interests  believe  and  feel  that  their  problems  would 
be  better  understood  by  the  Interstate  Commerce  Commission  than 
any  other  commission  control. 

It  is  gradually  dawning  upon  the  producers  that  their  real  troubles 
rest  upon  those  dispensing  the  meat  products  to  the  consumers  and 
not  upon  acts  or  omissions  of  those  handling  their  live  stock.  Give 
us  an  outlet  whereby  meat  will  reach  the  consumers  on  a reasonable 
margin  and  supply  and  demand  will  do  the  rest. 

I recently  made  a survey  of  wholesale  and  retail  meat  prices  in  my 
home  town — Chicago — and  the  conditions  disclosed  there  convinced 
me  that  retail  prices  are  without  rhyme  or  reason.  Only  within  the 
past  week  I checked  up  on  prices  in  two  shops  located  directly  across 
the  street  from  each  other  and  found  startling  comparisons. 

Meat  obtained  from  the  same  packer  was  being  sold  in  one  shop  at 
from  10  to  18  cents  per  pound  more  than  the  same  brand  and  cuts 
were  bringing  across  the  street.  In  another  shop  I found  a popular 
brand  of  sausage  retailing  at  the  same  price  it  was  bringing  during 
the  period  of  high  prices  of  last  fall  and  winter,  although  I happen  to 
know  that  the  maker  of  the  sausage  has  reduced  his  price  to  less  than 
the  prewar  basis. 

I was  offered  lard  of  a well-known  brand  at  exactly  two  and  one- 
half  times  the  price  that  brand  was  wholesaling  for  on  that  day. 
Bacon  costing  wholesale  30  to  35  cents  was  offered  at  55  to  65  cents 
per  pound,  the  buyer  paying  for  full  weight  and  no  trimming  de- 
ducted. Hams  which  were  wholesaling  at  28J  to  32  cents  were  being 
sold  at  prices  of  50  to  65  cents  for  center  slices.  This,  gentlemen,  is 
where  you  should  apply  the  remedy. 

If,  as  a representative  of  the  Consumers’  League  tells  us,  our  chil- 
dren are  going  hungry,  then  let  us  open  the  markets  for  them.  No 
consumer  in  America  hungers  for  meat  one-half  so  much  as  our  pro- 
ducers and  packers  hunger  for  the  chance  to  supply  them. 

A word  now  as  to  the  mysterious  forces  back  of  this  demand  for 
legislation.  I have  personally  attended  hearings  for  the  last  three 
years  on  the  different  bills  that  have  been  presented  for  controlling 
this  industry.  It  became  very  evident  two  years  ago  that  some 
great  organized  force  was  behind  this  attack  on  the  live-stock  industry 
and  every  United  States  Senator  and  Congressman  who  has  followed 
this  legislation,  I think,  is  convinced  by  this  time  this  wonderfully 
organized  force  of  wholesale  grocers,  who  are  the  proponents  of  this 
legislation,  have  done  more  to  tear  down  the  prices  of  the  farmers’ 
live-stock  products  than  anything  else  that  is  helping  to  force  prices 
downward.  I wonder  if  you  gentlemen  know  that  the  same  kind  of 
cattle  are  selling  at  $8  per  100  pounds  in  Chicago  that  two  years  ago 
sold  at  $19  and  $20  per  100  pounds.  I wonder  if  you  know  that  the 
same  grade  of  hogs  that  are  selling  at  $8.50  in  Chicago  sold  as  high  as 
$23  a year  ago  last  summer,  and  so  on  with  sheep,  lambs,  calves,  and 
everything  that  produces  meat  food  and  prices  have  been  “rattled 
down”  billions  of  dollars.  I consider  that  when  Attorney  General 
Palmer,  of  the  last  administration,  forced  divorce  of  the  packers  from 
their  allied  by-product  activities  that  he  did  more  to  hurt  the  farmer 
and  producer  in  America  than  any  one  thing  that  has  happened 
within  the  last  decade,  and  can  you  imagine,  gentlemen,  a Cabinet 
official  forcing  an  agreement  which  stopped  a competition  that  wa 


284 


MEAT  PACKER. 


actually  selling  food  products  to  the  consumer  under  the  prices  of  the 
products  the  wholesale  grocer  handled  ? If  that  is  not  keeping  up 
the  high  cost  of  living,  what  is  ? 

To  the  statement  which  I have  just  made  I desire  to  add  that  the 
live-stock  commission  man  found  wonderful  encouragement  in  the 
words  of  our  President  in  his  message  to  the  Sixty-seventh  Congress 
discouraging  governmental  interference  with  legitimate  business  and 
it  is  our  hope  that  his  thought  so  expressed  will  prevail  in  the  ultimate 
disposition  of  this  bill  by  this  honorable  committee. 

If,  in  the  wise  judgment  of  this  honorabie  committee,  they  finally 
determine  to  pass  some  legislation  along  this  line,  I do  now  say,  as 
I have  heretofore  said,  that  the  live-stock  commission  interests  have 
never  objected  to  any  form  of  registration.  They  do  not  object  to 
any  legislation  which  would  examine  their  business  similar  to  the 
examination  by  bank  examiners.  We  feel  that  the  control  of  the 
live-stock  commission  men  of  America  by  rules  of  the  exchanges 
of  the  27  large  primary  markets  of  the  United  States  are  equal  and 
far  superior  to  any  control  that  could  be  passed  by  any  legislation 
and  that  any  legislation  that  might  be  passed  should  conform  and 
cooperate  with  the  rules  of  these  exchanges. 

Gentlemen,  I am  here  now  in  Washington  to  aid  this  committee 
in  furnishing  any  information  that  they  may  desire  regarding  live- 
stock exchanges,  commission  men,  traders,  buyers,  or  sellers,  and  I, 
wish  to  tell  the  committee  that  not  only  now,  but  if  it  is  their  desire 
to  have  me  appear  before  this  honorable  committee  later  in  the 
construction  of  any  legislation,  I desire  to  inform  them  that  I am 
subject  to  their  command. 

Mr.  Thompson.  Mr.  Brown,  I would  like  to  ask  you  a question  in 
connection  with  that  to  clear  up  a situation  in  my  mind.  'You  speak 
of  the  retailer  as  being  responsible  for  this  high  price  of  meat.  For 
instance,  in  a small  community,  like  the  one  that  I live  in,  if  I am  a 
farmer  and  sell  my  cattle  to  my  local  butcher  for  so  much  on  the  hoof, 
and  I go  around  a few  days  after  that  to  buy  beefsteak  slaughtered 
by  him,  I am  confronted  by  these  same  high  prices,  and  the  explana- 
tion he  seems  to  give  is  that  these  big  packers  go  in  there  and  buy 
cattle  in  competition  with  him,  and  get  his  cattle  away  from  him, 
he  hasn’t  enough  meat  to  supply  the  market,  and  consequently  he 
has  to  depend  upon  them  for  not  only  some  of  their  by-products, 
but  also  for  their  actual  meats  in  order  to  supply  his  customers,  and 
one  of  those  men  has  said,  in  explanation,  that  before  he  can  secure 
that  he  must  enter  into  a gentleman’s  agreement  that  he  must 
maintain  their  prices,  their  retail  prices.  Now,  what  is  there  to  that  ? 

Mr.  Brown.  Well,  I pointed  out  to  you  that  in  my  opinion  the 
organization  of  retailers,  called  the  Retail  Butchers  & Grocers’  Asso- 
ciation, in  all  of  the  larger  cities  has  as  close  a working  agreement  as 
any  labor  union  in  America.  They  can  not  break  over  their  traces. 

Mr.  Thompson.  Then,  according  to  your  statement,  it  is  the  fault 
of  the  retail  butchers  more  than  it  is  of  the  packers  in  keeping  up 
this  retail  price  ? 

Mr.  Brown.  Well,  you  can  find  every  day’s  quotations  of  the 
prices  the  packers  are  wholesaling  their  meats  at,  and  then  you  can 
compare  them  with  the  prices  the  retailers  are  retailing  their  meats 
at,  and  then  you  can  form  your  own  conclusions,  as  I stated  in  my 
statement.  Where  10  or  15  years  ago  a retailer  was  satisfied  to  make 


MEAT  PACKER. 


285 


from  3 to  5 cents  a pound  on  meat,  to-day  he  is  not  at  all  satisfied 
unless  he  makes  10  cents  a pound  on  it,  and  he  is  making  oftener  20 
cents  a pound.  I think  any  commission  that  would  investigate  the 
prices  of  the  last  two  years  would  find  that  to  be  the  case. 

Mr.  Thompson.  When  I was  a boy,  in  northwestern  Ohio,  we  had 
our  own  slaughterhouses,  and  we  had  our  own  tanneries,  and  we  had 
our  own  cobblers  to  make  our  boots  and  shoes,  and  we  could  buy 
meat  at  10  cents  a pound,  and  we  could  buy  eggs  at  10  cents  a dozen. 
But  now  the  situation  is  so  much  different  that  our  people  don’t 
understand  really  what  the  trouble  is. 

Mr.  Brown.  Well,  I think  you  can  very,  very  easily  find  out. 
This  Agricultural  Committee  can  appoint  an  investigating  committee, 
and  I think  it  is  one  of  the  functions  of  your  committee,  gentlemen, 
to  do  so.  You  can  find  out,  in  the  first  place,  the  profits  of  the 
packers,  and  I know  you  can  find  them  out.  I don’t  think  the  profits 
of  the  packers  will  show  over  half  a cent  a pound,  taking  it  all  the 
way  through,  uniformly.  You  can  find  out,  as  I stated  a moment 
ago,  our  charges,  the  commission  charges  of  the  live-stock  commis- 
sion men. 

I was  the  head  of  a committee  that  made  a survey  of  the  charges 
of  all  commission  men  in  all  commodities  in  the  United  States  within 
the  last  year.  Our  average  charges  are  one-half  of  1 per  cent,  and 
it  is  no  uncommon  thing  in  other  commodities  to  see  a charge  of 
from  1 per  cent  up  to  as  high  as  10  per  cent.  There  is  nothing  that 
is  sold  on  so  small  a commission  in  America  to-day  as  live  stock. 
The  commission  charges  are  the  smallest  of  any  commodity  in  the 
country. 

Mr.  Jones.  Well,  Mr.  Brown,  is  there  any  real  competition  in  the 
buying  between  the  so-called  big  packers  ? 

Mr.  Brown.  Absolutely.  I am  a salesman  myself. 

Mr.  Jones.  Well,  do  you  ever  have  them  bid  against  each  other 
much  in  procuring  their  stuff  ? 

Mr.  Brown.  Yes,  I have  them  bidding  against  each  other  every 
day. 

Mr.  Jones.  Well,  what  is  the  use  of  their  bidding  against  each 
other  when  they  are  going  to  partition  out  the  stock  anyway? 

Mr.  Brown.  Well,  you  are  predicating  that  remark  on  the  assump- 
tion that  they  are  partitioning  out  the  stock.  Do  you  know  that  they 
do  partition  out  the  stock?  I don’t. 

Mr.  Jones.  Well,  they  know  that  they  are  going  to  get  about  the 
same  amount  relatively,  don’t  they? 

Mr.  Brown.  I don’t  know  that  they  do.  I have  never  heard  of 
any  such  arrangement.  But  answering  your  supposition.  In 
Chicago  Armour  at  the  height  of  the  season  can  kill  from  6,000  to 
10,000  hogs  a day.  Swift  can  kill  the  same.  I imagine  that  Wilson 
and  Morris  can  kill  about  5,000  each,  full  capacity.  You  go  down  to 
the  smaller  houses  that  can  kill  from  3,000  to  1,000  hogs  a day  each, 
and  there  are  probably  six  or  seven  of  them.  You  then  have  an 
unknown  factor  in  the  so-called  buying  of  the  eastern  shippers. 
They  will  buy  in  the  Chicago  market  anywhere  from  5,000  hogs  up 
to  20,000  in  a day.  Nobody  knows  until  the  day  is  over  how  many 
hogs  they  are  going  to  buy,  because  those  dispatches  come  in  from  all 
points,  all  over  the  east  and  central  west,  and  the  packers  themselves 
have  no  more  idea  what  the  eastern  shippers  are  going  to  buy  than 


286 


MEAT  PACKER. 


you  have.  So  that  there  can  not  be  any  parcelling  out  of  the  receipts 
of  a great  market  like  Chicago,  because  there  are  ^o  many  factors 
that  nobody  can  determine. 

Mr.  Jones.  Well,  whether  5,000  or  20,000  are  bought — and  you  say 
it  varies  from  5,000  to  20,000 — whether  orders  for  5,000  or  20,000 
come  in,  it  doesn’t  make  much  difference  in  the  price  that  they  pay  ? 

Mr.  Brown.  Yes. 

Mr.  Jones.  If  it  is  5,000  to-day  and  20,000  to-morrow,  the  price 
will  be  about  the  same  ? 

Mr.  Brown.  Well,  of  course  I was  here  this  morning  and  I heard 
the  talk  on  the  question  of  wide  fluctuations.  Very  naturally,  when 
there  is  a demand  for  from  15,000  to  20,000  from  eastern  shippers  it 
creates  competition  that  is  apt  to  put  the  market  up  from  10  cents  to 
a quarter,  and  when  it  is  not  present,  why  the  market  is  apt  to  drop 
that  much. 

Mr.  Jones.  Say  Swift  bids  $6.75  on  three  carloads  of  stock,  so 
many  head  of  stock,  and  then  if  Armour  bids  $7,  or  raises  that  bid, 
Swift  never  comes  back  and  bids  again,  does  he  ? 

Mr.  Brown.  He  very  often  does. 

Mr.  Jones.  Very  often? 

Mr.  Brown.  Yes. 

Mr.  Jones.  Do  they  ever  run  it  up  to  any  great  amount  that  way  ? 

Mr.  Brown.  Well,  during  the  war  I have  seen  the  big  packers  run 
it  up  on  themselves  anywhere  from  50  to  75  cents  in  a day. 

Mr.  Jones.  In  normal  times  there  isn’t  such  a great  difference  as 
that  in  a day,  is  there  ? 

Mr.  Brown.  The  fluctuations  have  not  been  as  wide  for  the  last 
six  or  seven  months,  but  I have  seen  Armour  outbid  Swift,  say,  15 
cents  on  a load  of  stock.  A shipper  would  come  along  and  bid  10 
cents  more  than  Swift,  say,  and  perhaps  in  a half  an  hour  after  that 
I will  see  Armour’s  or  Swift’s  buyer  buy  that  load  of  stock  higher 
than  the  shipper  bought  it. 

Mr.  Jones.  The  shipper  ran  that  up  in  that  instance  in  that 
illustration  that  you  gave  ? 

Mr.  Brown.  He  did  it  in  that  instance;  yes.  The  same  thing 
could  apply  to  a smaller  packer.  We  have  a factor  in  the  Chicago 
market  that  is  quite  active  at  times  called  the  “yard  trader,”  the 
speculator.  It  is  very  often  that  the  packer  thinks  that  the  cattle 
or  the  hogs  are  not  worth  as  much  as  the  prevailing  prices;  the 
speculator  will  come  in  and  he  will  buy  up  over  half  the  stuff,  and 
before  the  day  is  over  he  may  have  sold  all  of  his  stuff,  and  probably 
has,  to  the  eastern  shippers  and  small  speculators,  and  I have  seen 
all  the  packers  left  high  and  dry,  all  the  big  packers,  so  they  couldn’t 
get  any,  hardly. 

Mr.  Jones.  But  that,  again,  is  an  illustration  of  where  the  so- 
called  independent  buyer  came  in  and  ran  it  up.  I am  talking  about 
as  between  themselves,  when  one  runs  the  other  up  and  buys  one  lot 
of  stock  and  the  next  lot  comes  in  and  the  other  man  will  run  it  up 
a little  and  take  it,  won’t  he? 

Mr.  Brown.  I don’t  find  it  so;  no,  sir. 

Mr.  Jones.  You  don’t  find  it  that  way? 

Mr.  Brown.  No.  The  large  packers  are  willing  to  bid  on  any  car- 
load of  stock  that  comes  into  the  market,  and  there  isn’t  any  with- 
holding of  their  buying  orders  from  any  particular  branch  of  live 
stock,  or  from  any  particular  number  of  commission  men. 


MEAT  PACKER. 


287 


Mr.  Jones.  Here  is  a letter  that  purports  to  have  been  written  by 
E.  A.  Cudahy,  addressed  to  Mr.  M.  R.  Murphy,  dated  November  27, 
1911,  and  I will  read  a part  of  it: 

I had  a call  from  your  neighbor  to-day  and  he  agrees  that  we  are  paying  too  much 
money  for  hogs  at  Omaha  and  Sioux  City,  and  that  if  we  could  get  Omaha  right,  of 
course,  it  would  regulate  Sioux  City,  and  he  believes  the  best  plan  would  be  to  let 
other  people  have  what  they  want  and  then  split  what  is  left.  I believe  in  this  plan, 
and  I would  advise  you  to  work  on  it  for  this  week,  and  I would  suggest  that  you  either 
call  him  on  the  phone  or  see  him  some  time  to-morrow  and  talk  the  matter  over. 

And  so  forth. 

Mr.  Creigh.  What  is  the  date  of  that  letter,  Mr.  Jones  ? 

Mr.  Jones.  November  27,  1911. 

Mr.  Brown.  I don’t  know  anything  about  those  letters,  gentlemen. 

Mr.  Jones.  Well,  you  were  in  the  business  at  that  time,  weren’t 
you,  Mr.  Brown  ? 

Mr.  Brown.  Yes.  I wasn’t  in  Chicago. 

Mr.  Jones.  Have  you  ever  known  of  them  not  seeming  to  bid 
against  each  other?  Not  raising  each  other?  And  apparently  trying 
to  hold  the  market  that  way  ? 

Mr.  Brown.  I have  seen  Armour  stay  out  of  the  market  entirely 
and  not  buy  a hog. 

Mr.  Jones.  Yes. 

Mr.  Brown.  I have  seen  Swift  do  the  same  thing. 

Mr.  Jones.  Yes. 

Mr.  Brown.  I have  seen  each  one  of  the  smaller  independent 
packing  houses  do  the  same  thing.  They  probably  have  their  own 
reasons,  and  the  reason  may  be  that  they  can  not  buy  that  stock  to 
sell  it  to  make  any  money.  There  is  no  law  forcing  those  people  to 
buy  stock  that  is  losing  them  money  that  I know  of. 

Mr.  Jones.  You  have  never  seen  any  evidence,  then,  to  indicate 
a sort  of  an  agreement  on  the  part  of  the  big  packers  that  they  would 
run  this  up  where  there  were  certain  demands  on  certain  days,  and 
would  let  things  ride  at  a uniform  level  ? 

Mr.  Brown.  No;  I have  never  seen  anything  to  my  mind  that 
looked  like  a prearranged  plan,  because  each  and  every  one  comes 
in  on  that  market  and  apparently  disregarding  everything  that  the 
other  man  is  doing,  make  their  own  bid  on  their  own  basis,  on  the 
basis  of  the  buyer’s  intelligence. 

Mr.  Jones.  Well,  if  they  did  that  it  would  tend  to  hold  the  prices 
of  stock  lower,  wouldn’t  it,  if  the  concern  that  bought  the  larger 
percentage  of  them  acted  upon  that  kind  of  a plan? 

Mr.  Brown.  I think  if  they  all  acted  along  any  preconcerted  plan 
to  abstain  from  buying  it  would  have  the  effect,  naturally,  of  lessen- 
ing competition. 

Mr.  Jones.  Yes;  and  therefore  of  keeping  the  price  lower,  naturally, 
wouldn’t  it? 

Mr.  Brown.  Very  naturally. 

Mr.  Jones.  Then  even  granting,  for  the  sake  of  argument,  that  the 
packers  are  operating  on  a narrow  enough  margin — that  is,  that  they 
are  not  getting  too  much  profit — would  it  be  quite  fair  to  the  pro- 
ducer to  have  that  kind  of  an  arrangement  ? 

Mr.  Brown.  I don’t  think  any  arrangement  of  that  kind  is  fair, 
and  I don’t  know  that  any  such  arrangement  exists.  I am  merely 
answering  the  hypothetical  questions  as  you  are  putting  them. 

Mr.  Jones.  I understand. 


288 


MEAT  PACKER. 


Mr.  Brown.  Yes,  sir;  that  is  all. 

Mr.  Gernerd.  Mr.  Brown,  isn’t  this  true,  that  the  cost  of  products 
to-day  has  been  materially  reduced  by  reason  of  there  being  hardly 
any  demands  for  the  by-products  in  the  slaughtering  of  both  cattle 
and  hogs  ? 

Mr.  Brown.  I think  that  has  been  a great  factor.  I think,  as  I 
said  before,  that  the  divorcing  of  the  allied  by-products  activities 
by  the  Attorney  General,  not  allowing  the  packers  to  operate  as  they 
had  heretofore,  has,  in  my  opinion,  done  more  to  hurt  the  producer 
than  almost  any  other  one  thing  that  has  happened.  The  packer 
doesn’t  know  where  he  is  at.  He  could  figure  before  this  agreement 
that  perhaps  he  could  make  good  money  on  this  by-product.  I have 
seen  times — and  the  packers  can  bear  this  statement  out — when  they 
will  go  along  two  or  three  months  at  a time  losing  money  on  beef, 
losing  money  on  pork  products,  particularly  in  the  fall  of  the  year, 
when  the  market  is  continually  breaking  under  heavy  supplies,  but 
in  the  wash,  finally,  at  the  end  of  the  year,  they  have  been  able  to 
recoup  themeslves  by  profits  that  they  have  made  on  by-products, 
which  they  can  not  do  any  longer  if  the  by-products  are  going  to  be 
divorced  from  their  activities. 

Does  that  answer  your  question  ? 

Mr.  Gernerd.  Yes. 

Mr.  Kincheloe.  Mr.  Brown,  you  were  speaking  of  the  difference 
between  the  price  the  producer  gets  and  that  the  consumer  has  to  pay. 
Have  you  ever  in  your  experience  seen  as  great  a spread  as  there  is 
now  ? 

Mr.  Brown.  I don’t  think  I have,  Congressman. 

Mr.  Kincheloe.  Well,  how  do  you  account  for  that?  What  do 
you  give  as  a prime  reason,  in  your  judgment,  for  that  spread? 

Mr.  Brown.  Well,  my  reason  is  that  the  retailer  was  allowed  to 
run  wild  during  the  war.  The  Food  Administration  tried  to  take  over 
these  sentimental  controls,  the  packers,  and  other  things,  and  they 
allowed  the  packers  to  make  a certain  per  cent;  they  made  a certain 
agreement  that  the  packers  would  be  allowed  to  make,  I believe,  9 
per  cent.  There  was  no  control  of  the  retailer  at  all,  and  he  ran  wild, 
and  he  got  prices  up  to  a point  that  he  couldn’t  believe  himself 
hardly,  and  he  has  never  been  willing  to  take  off.  He  has  taken  off  a 
little  bit,  to  be  sure,  a cent  or  two  here  and  there,  but  in  the  close 
analysis  of  the  proposition  he  is  making  a whole  lot  more  money  now 
than  he  did  during  the  war,  a great  deal  more. 

Mr.  Kincheloe.  I was  very  much  interested  in  that  part  of  your 
statement  where  you  showed  the  difference  in  the  retail  prices  be- 
tween two  butchers.  They  were  across  the  street  from  each  other 
in  your  city,  were  they  ? 

Mr.  Brown.  Yes. 

Mr.  Kincheloe.  I don’t  remember  if  you  said  what  the  difference 
was.  Do  you  remember  now  what  was  the  difference,  practically, 
in  per  cent? 

Mr.  Brown.  Well,  it  was  from  10  to  18  cents,  I think,  per  pound. 

Mr.  Kincheloe.  Of  the  same  stuff? 

Mr.  Brown.  Yes. 

Mr.  Kincheloe.  From  the  same  people? 

Mr.  Brown.  Yes. 

Mr.  Kincheloe.  And  they  were  just  across  the  street  from  each 
other  ? 


MEAT  PACKER. 


289 


Mr.  Brown.  Yes,  sir. ^ And  that  could  apply,  for  instance,  as 
regards  these  cash-and-carry  stores;  there  are  now,  as  you  know, 
Congressman,  in  a great  many  cities,  these  cash-and-carry  stores, 
these  Piggly  Wigglies,  and  one  thing  and  another,  where  they  haven’t 
got  the  overhead  that  the  retailer  has,  and  where  they  can  sell  this 
stuff  at  that  much  of  a difference. 

Mr.  Kincheloe.  But  as  I understood,  in  your  illustration  the 
overhead  was  practically  the  same  in  both  cases;  they  were  doing  the 
business  in  the  same  way,  practically  ? 

Mr.  Brown.  Yes;  in  that  case  it  was;  they  were  doing  business 
practically  in  the  same  way. 

Mr.  Kincheloe.  Well,  of  course,  I can  see  the  economy  of  the 
Piggly  Wiggly  plan  in  the  matter  of  overhead. 

Mr.  Brown.  Yes. 

Mr.  Tincher.  Now,  you  don’t  claim  that  the  fluctuations  were  any 
worse  during  the  war  than  they  have  been  since  the  war,  do  you? 
It  fluctuated  up  part  of  the  time  and  it  has  been  fluctuating  down 
since,  hasn’t  it  ? 

Mr.  Brown.  You  are  absolutely  right,  Mr.  Tincher.  The  fluctua- 
tions I don’t  think  have  been  nearly  as  wide  during  the  last  four 
months.  Prior  to  that  time,  they  have  been  what  we  thought  un- 
reasonable. 

Mr.  Tincher.  Some  of  the  boys  down  home  claim  that  there  has 
been  as  much  as  a dollar  a hundred  in  a day  on  some  cattle  and  sheep. 
I don’t  know  of  any  worse  fluctuations  than  that. 

Mr.  Brown.  No;  there  have  been  declines  of  a dollar  a hundred  in 
cattle,  and  there  have  been  advances  of  a dollar  a hundred. 

Mr.  Tincher.  There  have  not  been  any  advances  recently  ? 

Mr.  Brown.  No;  there  have  not  been  any  advances  recently. 

Mr.  Tincher.  And  there  can  not  be  any  more  dollar-a-hundred 
declines,  because  there  isn’t  any  room  for  them. 

Mr.  Brown.  We  are  getting  down  to  rock-bottom. 

For  the  information  of  the  committee,  I,  as  president  of  the  National 
Live  Stock  Exchange,  tried  to  get  together  the  leading  men  among  the 
producers,  for  instance,  of  the  farm  organizations,  like  Mr.  Howard,  of 
the  American  Farm  Bureau,  and  Mr.  Mumford,  the  head  of  the  Illinois 
Agricultural  Society.  I think  we  called  in  40  or  50  of  the  so-called 
heads  of  the  farmers’  societies  to  meet  with  the  representatives  of  the 
commission  men  of  the  10  largest  markets,  and  we  called  in  10  of  the 
largest  packers  to  see  if  we  could  not  get  the  packers,  the  commission 
men  who  sold  the  stock,  and  the  producers  to  agree  upon  some  plan 
that  would  minimize  these  fluctuations  you  are  talking  about.  Well, 
we  got  the  packers  in,  and  we  got  the  commission  men  in,  and  we  got 
acceptances  from  Messrs.  Howard  and  Mumford  and  several  others, 
and  the  producers’  representatives  never  showed  up — never  entered 
the  meetings  at  all. 

I think  that  we  can  say  without  any  fear  of  contradiction  by  the 
commission  man  or  packer  in  the  trade  that  they  have  been  willing 
to  meet  the  producer  at  any  and  all  times  on  any  basis  to  try  to 
effect  any  improvement  in  the  conditions  that  have  prevailed  during 
the  last  year,  which  we  know  have  been  abnormal. 

Mr.  Voigt.  I would  like  to  ask  a question,  Mr.  Brown.  I have 
here  a table  prepared  by  the  Federal  Trade  Commission,  which  is 

46985—21 19 


290 


MEAT  PACKER. 


found  at  page  243  of  Part  2 of  the  Federal  Trade  Commission  Report. 
This  table  gives  the  total  purchases  week  by  week  of  the  Big  Five 
packers  of  all  animals — that  is,  it  takes  in  cattle,  sheep  and  hogs,  in 
the  principal  markets  of  this  country. 

Now,  I find  by  this  table  that  for  the  week  ending  April  8,  1916, 
the  total  purchases  made  by  the  Big  Five  were  62,006  head  of  all 
kinds.  That  was  the  lowest  amount  for  any  week  in  that  year. 
Now,  I find  that  the  highest  amount  in  any  week  was  for  the  week 
ending  November  18,  1916,  190,686  head.  That  is,  in  November  of 
1916,  in  one  week  there  were  three  times  as  many  head  bought  by 
the  packers  as  bought  in  that  week  in  April. 

Now,  during  that  low  week,  the  lowest  week  in  the  year,  if  these 
five  packers  were  in  competition,  there  would  be  considerable  com- 
petition among  them  to  get  their  requirements,  would  there  not  ? 

Mr.  Brown.  Well,  you  have  got  to  figure  that  in  April  you  have  got 
a month  that  is  between  seasons.  I think  I can  say  that  in  19  years 
out  of  20,  the  month  of  April  is  between  seasons.  For  instance,  the 
winter  crop  of  hogs  is  marketed,  and  the  winter  crop  of  cattle,  and 
the  spring  run,  that  starts  in  May  and  June,  the  last  half  of  May  and 
the  1st  of  June,  is  not  started  yet;  it  is  sort  of  between  the  hay  and 
grass  period,  and  they  could  not  buy  any  more  if  they  tried  to,  because 
it  isn’t  there. 

Mr.  Voigt.  Now,  the  point  I want  to  get  at  is  this.  While  during 
this  one  week  there  were  more  than  three  times  as  many  head  bought 
by  the  five  packers,  they  bought  practically  the  same  percentage  dur- 
ing both  weeks.  For  instance,  when  there  were  62,000  head,  in  that 
week  Swift  bought  34.56  per  cent.  When  there  were  190,000  Swift 
bought  35.76. 

Armour  bought  27.61  per  cent  in  the  small  week,  and  in  the  large 
week  he  bought  25.95  per  cent. 

Morris  bought  in  the  small  week  17.68  per  cent,  and  in  the  large 
week  18.53  per  cent. 

Now,  the  thing  I can  not  understand  is  how  when  there  is  a glut  in 
the  market — now  here  is  the  highest  week  in  the  year  1916— that 
these  packers,  nevertheless,  go  in  there  and  buy  practically  exactly 
the  same  percentage.  They  buy  practically  the  same  percentage 
that  they  do  when  there  is  a scarcity  in  the  market.  Can  you  explain 
that? 

Mr.  Brown.  I don’t  know  their  method  of  working  that,  Mr. 
Voigt,  but  I think  in  the  large  week  that  you  speak  of — was  it  a 
week  ? 

Mr.  Voigt.  One  week. 

Mr.  Brown.  One  week.  Well,  in  the  large  week  you  speak  of 
they  probably  bought  their  utmost  capacity;  that  was  during  the 
war  period,  and  I think  you  can  figure  that  they  bought  all  their 
stuff  that  they  could  kill. 

Mr.  Voigt.  Well,  according  to  these  figures  they  bought  their 
capacity  during  the  biggest  week,  and  they  bought  the  same  per- 
centage during  the  lowest  week. 

Mr.  Brown.  Well,  they  bought  all  they  could  buy  the  lowest 
week.  In  the  lowest  week  there  is  a small  amount  of  live  stock. 

Mr.  Voigt.  Well,  the  thing  that  strikes  me  is:  That  gives  the  pur- 
chases now  during  every  week  in  the  year,  and  it  gives  the  percentage 
bought  by  each  of  the  Big  Five  during  each  week,  and  those  per- 


MEAT  PACKER. 


291 


centages  run  practically  constant  throughout  the  year;  it  doesn’t 
make  any  difference  how  high  or  how  low  the  supply  is.  Do  you 
assume  that  the  demand  for  live  stock  on  the  part  of  these  five 
packers  is  the  same  every  day  of  the  year  ? 

Mr.  Brown.  No;  I wouldn’t  assume  that,  and  I know  it  is  not  the 
fact.  Their  sales  distributions  are  much  more  active  at  some  times 
than  they  are  at  others.  They  are  able  to  sell  considerably  more 
stuff  at  some  times,  export  more  stuff  at  some  times  than  they  can 
at  others.  But  they  have  got  to  get  in  on  those  periods  of  big  re- 
ceipts; they  figure  it  to  be  their  duty  to  themselves  and  the  producers, 
and  they  do  it  very  often  at  a loss.  They  take  that  stock  and  they 
take  it  day  after  day,  and  they  take  their  capacity,  take  all  they  can 
kill,  and  during  the  last  year  I personally  know  that  they  have  lost 
money  on  every  head  of  hogs  that  they  bought  when  they  were 
doing  that.  They  were  taking  that  chance. 

Mr.  Voigt.  Yes;  but  according  to  this  table,  in  one  week  of  the 
year  the  supply  is  three  times  as  large  as  in  another  week. 

Mr.  Brown.  Yes. 

Mr.  Voigt.  And  these  five  concerns  are  always  buying  at  practi- 
cally the  same  percentage.  Now,  isn’t  there  a condition  in  the  meat- 
packing industry,  at  times  anyway,  when  one  packer  would  have  a 
greater  demand  for  meat  animals  than  some  other  packer  ? 

Mr.  Brown.  Well,  I can  imagine  that  to  be  the  case;  yes,  sir. 

Mr.  Voigt.  Well,  now,  if  that  is  the  case,  you  would  expect  to 
find  that  increased  demand  on  the  part  of  a single  packer  reflected 
in  his  buying  on  the  market,  wouldn’t  you? 

Mr.  Brown.  Well,  I think  that  the  packers— -now  this  is  all  sup- 
position on  my  part,  because  I don’t  know  of  any  agreement  that 
has  ever  been 

Mr.  Voigt  (interposing).  No,  no;  now,  let  us  not  talk  about  any 
agreement. 

Mr.  Brown.  Or  of  any  percentage;  I don’t  know  of  any  regula- 
tion among  themselves. 

Mr.  Voigt.  Now,  let  us  just  get  away  from  that. 

Mr.  Brown.  All  right. 

Mr.  Voigt.  I am  asking  you  this:  You  do  think  that  there  is  a 
time  in  the  packing  business  when  one  packer  would  have  a larger 
demand  for  live  animals  than  another  packer  ? 

Mr.  Brown.  Why,  I think  it  is  very  natural  that,  for  instance, 
Mr.  Wilson  might  get  an  order  from  Antwerp  or  London  or  Paris— 
wherever  his  branch  house  was— and  he  might  beat  Armour’s  or 
Swift’s  or  Morris’s  salesman  to  that  order,  and  get  a line  of  stuff  that 
he  perhaps  could  have  a bigger  outlet  for  than  they  could  right  at 
that  time.  But,  during  the  next  day,  they  are  liable  to  get  in  some 
place  where  they  can  get  something  that  he  can  not  get. 

Mr.  Voigt.  That  may  be  true,  but  you  don’t  assume  now  that 
these  men  equalize  each  other  in  their  sales  from  day  to  day,  do  you  ? 

Mr.  Brown.  I think  that  they  have  a good  deal  of  pride  in  their 
business,  Mr.  Voigt.  I don’t  think  that  they  would  like  to  see  any 
of  the  other  packers  get  any  more  of  the  stocK  than  they  are  getting, 
and  that  they  think  they  ought  to  get. 

Mr.  Voigt.  I understand  all  that. 

Mr.  Brown.  Wait  a minute.  They  have  the  ultimate  idea  in 
view  that  they  are  going  to  be  able  to  sell  that  stuff  just  as  well  as 
the  other  fellow  is  going  to  sell  it,  when  the  time  comes. 


292 


MEAT  PACKER. 


Mr.  Voigt.  That  is  true.  But  I would  like  to  have  you  explain, 
if  you  can,  how  it  is  that  no  matter  what  the  condition  of  the  live- 
stock market  may  be  as  to  receipts  that  these  five  packers  are  all  the 
time  buying  the  same  percentage,  as  among  each  other  ? 

Mr.  Brown.  Well,  I don’t  know  that  they  are  buying  the  same 
percentage.  You  have  quoted  two  weeks  in  1916.  I have  not  exam- 
ined those  records,  and  I don’t  know. that  to  be  the  case. 

Mr.  Voigt.  Well,  now,  let  me  refer  to  this  table.  In  the  first 
week  of  January,  1916,  Swift  bought  34.73  per  cent  of  all  the  pur- 
chases of  the  packers  combined.  Once  in  a while  he  jumps  up  to  35 
per  cent.  Sometimes  he  drops  to  33  and  a fraction.  But  it  averages 
very  close  to  34  per  cent.  You  have  the  table  there,  have  you  ? 

Mr.  Creigh.  This  is  the  table  that  you  are  referring  to.  The  report 
of  the  commission. 

Mr.  Voigt.  Page  243. 

Mr.  Brown.  This  is  the  table,  running  from  January  the  8th  down 
through  to  December  30  ? 

Mr.  Voigt.  Yes,  sir. 

Mr.  Brown.  Now,  what  is  your  question,  Congressman  ? 

Mr.  Voigt.  I would  like  to  have  you  explain,  if  you  can,  why  there 
is  the  uniformity  of  purchases,  when  the  total  purchases  fluctuate  ? 

Mr.  Brown.  Well,  I think  that  that  is  a capacity  proposition,  Mr. 
Voigt.  I think  that  when  the  supply  is  large  enough  they  will  work 
to  near  capacity.  That  is,  all  they  can  kill,  all  their  operating  force 
can  handle.  When  the  receipts  fall  off  I think  that  it  is  only  natural 
to  figure  that  they  are  going  to  operate  on  as  near  a basis  on  per- 
centages as  they  would  on  that  maximum  basis,  because  they  can 
not  figure  what  is  going  to  be  taken.  For  instance,  there  are  seven 
independent  packers  there  in  Chicago.  They  don’t  know  what  they 
are  going  to  take ; that  is,  what  percentage  they  are  going  to  take  of 
the  receipts.  They  don’t  know  what  percentage  the  eastern  shippers 
are  going  to  take. 

Mr.  Voigt.  Well,  we  do  know  this,  that  of  all  the  meat  animals 
handled  in  interstate  commerce,  all  the  other  fellows  besides  the  Big- 
Five  only  control  about  15  per  cent.  So,  then,  the  men  that  control 
the  15  per  cent;  that  is,  the  men  that  have  capacity  for  the  15  per 
cent,  can  not  very  well  expand  their  capacity  to  30  or  40  per  cent  ? 

Mr.  Brown.  Well,  you  are  not  taking  into  consideration  that  the 
15  per  cent  that  is  handled  in  interstate  commerce  is  all  that  the 
samller  packer  and  the  local  butcher  takes.  His  product  never  gets 
into  interstate  commerce  at  all. 

Mr.  Voigt.  That  is  why  we  don’t  figure  it. 

Mr.  Brown.  Yes.  I don’t  know  what  the  percentage  would  be  of 
the  total  killed.  Say  in  a city  like  Chicago,  that  probably  could  be 
figured  out.  But  I heard  this  brought  up  this  morning,  that  this  84 
or  85  per  cent  of  the  meat  foods  in  interstate  commerce  was  shipped 
by  the  Big  Five. 

Mr.  Voigt.  Handled  by  the  Big  Five? 

Mr.  Brown.  Yes.  But  when  you  get  to  figuring  the  totals  of  the 
amount  of  meat  that  was  packed  or  the  amount  of  animals  killed,  you 
will  find  in  the  cities  like  Chicago,  that  perhaps  there  is  a quarter  of  the 
amount  of  stock  that  is  killed  in  Chicago  that  goes  right  into  the 
channels  of  consumption  in  Chicago,  or  in  such  towns  as  Gary  or  the 
different  towns  around  Chicago,  that  can  be  reached  by  truck. 


MEAT  PACKER. 


293 


Mr.  Voigt.  Well,  I think  that  that  class  of  animals  that  are  bought 
in  the  Chicago  market  are  included  in  this  table.  You  will  notice 
that  this  table  says:  “ Cattle,  sheep,  and  hogs  for  principal  markets 
combined. 7 ’ Now,  then,  that  takes  in  all  animals  that  are  bought 
and  sold  on  the  markets,  so  that  takes  in  that. 

Mr.  Brown.  Well,  that  would  not  take  in  meat  in  interstate  com- 
merce, though. 

Mr.  Voigt.  Yes;  I take  it  that  this  takes  in  all  the  animals  that 
were  sold  on  the  principal  markets,  whether  for  interstate  con- 
sumption, or  for  local  consumption. 

Mr.  Brown.  Well,  I am  not  advised  on  that.  An  expert  could  tell 
about  that. 

Mr.  Voigt.  Well,  now,  let  us  get  back  to  the  question.  If  all  the 
other  packers  outside  of  the  Big  Five  control  15  per  cent  of  the 
interstate  product,  they  could  not,  by  any  stretch  of  the  imagination, 
run  at  double  that  capacity,  do  you  think  so  ? 

Mr.  Brown.  Well,  if  your  supposition  is  right — which  it  is  not— 
I happen  to  know  that  in  the  Chicago  market  the  eastern  shippers 
and  the  packers  outside  of  the  Big  Four  (Cudahy  is  not  packing 
in  Chicago) — I happen  to  know,  and  I think  the  figures  will  bear  me 
out,  that  a great  deal  of  the  time  the  Big  Four  packers  will  not  take 
over  50  per  cent  of  the  hogs  or  cattle. 

Mr.  Voigt.  Well,  I am  basing  my  assumption  on  the  report  of  the 
Federal  Trade  Commission. 

Mr.  Brown.  Well,  there  is  a lot  of  that  report  that  I don’t  believe, 
and  a great  many  other  people  don’t  believe. 

Mr.  Voigt.  Well,  at  the  last  hearing  on  this  subject  I think  the 
packers  admitted  that  they  controlled  about  85  per  cent  of  all  meat 
in  interstate  commerce. 

Mr.  Brown.  That  may  be. 

Mr.  Voigt.  Now  let  us  assume  that  the  small  packers  could  swell 
up  their  capacity  to  25  per  cent.  That  would  still  leave  75  per  cent 
of  all  the  animals  in  interstate  traffic  to  be  taken  by  the  Big  Five. 
Now  you  say  that  these  figures  that  I have  called  your  attention  to 
are  based  on  a capacity  assumption. 

Mr.  Brown.  I would  imagine  that  if  there  was  any  comparison 
of  that  kind  made  that  they  would  figure  from  capacity;  yes,  sir. 

Mr.  Voigt.  Well,  now  then,  judging  by  these  figures,  they  evi- 
dently have  the  capacity  to  absorb  all  the  cattle  and  hogs  and  sheep 
that  they  purchased  during  these  weeks.  They  did  purchase  185,000 
in  one  week,  and  they  purchased  60,000  in  another  week.  Now,  then, 
when  they  purchased  the  60,000  they  only  purchased  one-third  of 
their  capacity,  that  is  true.  Now  the  thing  I can  not  get  through  my 
head  is  why  then  they  were  only  running  one-third  capacity  there 
wasn’t  one  of  these  five  packers  that  had  a bigger  demand  for  the 
stock  that  was  offered  during  that  one  week  then  when  185,000  head 
were  offered.  I would  like  to  have  you  explain  that  if  you  can. 

Mr  Brown.  I can  not,  but  I think  that  if  you  asked  one  of  the 
large  packers — and  you  probably  will  have  one  before  your  com- 
mittee— he  can  explain  that  very  readily. 

Mr.  Creigii.  Mr.  Voigt,  will  you  pardon  me.  Take  you!  column 
there  for  Cudahy. 

Mr.  Voigt.  Cudahy? 

Mr.  Creigii.  Yes. 


294 


MEAT  PACKER. 


Mr.  Voigt.  The  week  ending  April  8 you  bought  11.84  and  the 
week  ending  November  8 you  bought  9.62"  Your  average  appears  to 
be  somewhat  over  10  per  cent.  You  went  a little  above  in  April 
and  you  fell  a little  behind  in  November. 

Mr.  Creigh.  In  other  words,  when  the  hood  of  the  cattle  was 
coming  in  there  we  fell  off  25  per  cent  from  what  you  would  call  an 
agreed  percentage. 

Mr.  Voigt.  You  didn’t  fall  off  any  25  per  cent. 

Mr.  Creigii.  From  8 per  cent,  if  you  please,  to  11. 

Mr.  Voigt.  In  the  week  ending  November  18  there  were  190,668. 

Mr.  Txncher.  They  bought  what  per  cent  of  that  ? 

Mr.  Voigt.  Cudahy  bought  9.62  per  cent  during  that  week.  The 
thing  I can  not  understand  about  this  table  is  how  these  purchases 
run  so  uniform  for  all  these  packers,  no  matter  what  the  amount  of 
stock  there  is.  I would  like  to  have  some  one  explain  that,  if  it  is 
capable  of  explanation. 

Mr.  Tincher.  What  he  wants  to  know  is  this:  You  had  the  same 
capacity  in  April  as  you  had  in  November? 

Mr.  Creigh.  That  is  right. 

Mr.  Tincher.  And  you  only  bought  682  head  of  cattle  that  week. 

Mr.  Creigh.  Six  hundred  and  eighty-two  ? 

Mr.  Tincher.  How  many  were  they? 

Mr.  Creigh.  Heavier  than  that.  More  than  682  cattle. 

Mr.  Brown.  Why,  Mr.  Tincher,  I don’t  think  that  you  will  find 
that  they  have  the  same  capacity. 

Mr.  Tincher.  Six  thousand  eight  hundred  and  twenty  head  of 
cattle. 

Mr.  Creigh.  Now  wait.  I hate  to  take  up  Mr.  Brown’s  time,  but 
this  is  something  that  you  men  have  been  after,  so  I will  stay  by  you 
as  long  as  you  wish,  or  when  it  is  my  turn  I will  explain  it.  I think 
if  you  will  listen  and  understand  it — and  I don’t  say  that  you  are  not 
trying  to,  but  things  that  seem  sort  of  easy  on  this  side  are  kind  of 
difficult  for  you  men  that  are  in  there.  Now  take  this  figure.  What 
is  the  week,  if  you  please,  Mr.  Voigt,  that  you  are  working  on? 

Mr.  Voigt.  Do  you  want  the  high  week  or  the  low  week  ? 

Mr.  Creigh.  Well,  you  started  on  the  week  of  April  8,  1916.  This 
is  in  cattle. 

Mr.  Voigt.  No,  this  is  cattle,  hogs,  and  sheep  combined. 

Mr.  Creigh.  Well,  the  table  Exhibit  No.  2 is  what  I am  looking  at. 
Which  one  is  your  table? 

Mr.  Voigt.  Page  243. 

Mr.  Creigh.  That  is  cattle  there,  if  you  please.  The  next  page  is 
hogs,  and  the  next  page  is  sheep. 

Mr.  Voigt.  All  right,  take  the  cattle. 

Mr.  Creigh.  Now,  the  week  of  April  8 there  were  total  purchases 
of  all  packers  of  62,606  head. 

Mr.  Voigt.  No;  62,006,  practically  62,000. 

Mr.  Creigh.  Sixty- two  thousand  and  six.  Well,  that  is  due  to 
my  eyesight.  It  looked  like  62,606. 

Mr.  Voigt.  Well,  practically  62,000. 

Mr.  Tincher.  You  bought  11  per  cent. 

Mr.  Creigh.  We  bought  8.31,  for  Cudahy.  Well,  that  would 
figure  about  5,000  head,  I should  say. 

Mr.  Tincher.  All  right.  Now,  what  did  you  buy  in  the  high  week  ? 


MEAT  PACKER. 


295 


Mr.  Creigh.  Now  here  is  the  high  week,  November  18,  190,686, 
and  in  that  week  we  bought  9.62.  In  other  words,  we  increased 
more  than  10  per  cent  of  our  whole  business  during  that  time. 

Mr.  Voigt.  You  bought  three  times  as  many  in  that  later  month 
as  you  did  in  that  earlier  month. 

Mr.  Creigh.  Well,  let  me  explain  that.  It  is  perfectly  easy  to 
explain.  Now,  as  to  these  receipts,  Mr.  Tincher  probably  and  some 
Montana  people  know  better  than  anybody  else,  that  there  is  every 
sort  of  a grade  of  animal  coming  along  in  the  fall.  In  these  earlier 
and  slack  seasons  there  is  more  or  less  of  steady  trade.  In  these 
later  times  there  are  all  sorts  of  grades,  for  canneries  and  that  sort 
of  thing.  Differences  in  grades  and  in  users  of  the  stuff,  that  is,  as 
to  whether  you  have  got  a butcher  trade  or  canning  trade,  and  all 
that  sort  of  thing.  Now,  the  differences  in  the  animals  here  are  so 
infinitely  great  that  when  you  come  to  try  to  compact  them  into  a 
percentage  thing  it  has  no  meaning  at  all,  practically.  It  has  a very 
apparent  meaning  to  one  that  doesn’t  know  what  is  underneath  there. 

Mr.  Tincher.  In  speaking  of  grades,  I understood  that  the  packers 
only  bought  about  four  grades,  and  sold  45;  is  that  it? 

Mr.  Creigh.  Of  cattle  ? 

Mr.  Tincher.  Bought  about  four  grades  and  sold  45.  Or  is  it  45 
grades  that  they  bought,  and  sold  four  grades  ? 

Mr.  Creigh.  Well,  I think  they  buy  every  sort  and  kind,  and  sell 
every  sort  and  kind. 

Mr.  Tincher.  Well,  if  you  had  62,000  head  of  cattle  on  the  market, 
and  you  handled  5,000  of  them,  and  at  another  time  when  there  were 
about  three  times  as  many  head  of  cattle  on  the  market  you  handled 
about  the  same  percentage,  I can  see  the  mystery  that  surrounds  the 
thing,  and  from  the  knowledge  that  I have  got  I am  frank  to  say  to 
you  that  it  is  not  as  clear  to  me  as  it  seems  to  be  to  you.  It  is  not 
as  clear  to  me  as  it  is  to  you,  when  you,  with  your  same  capacity, 
handled  18,000  head  on  one  day,  more  than  18,000,  and  handled  the 
same  per  cent  on  the  day  when  the  lowest  number  were  on  the 
market,  that  is,  handled  the  same  relative  percentage  as  to  numbers. 

Mr.  Creigh.  Now,  look  at  the  difference  in  the  per  cent,  if  you 
please.  Now,  here  in  this  April  period  we  had  5,000  cattle,  wasn’t 
that  it  ? 

Mr.  Tincher.  Yes. 

Mr.  Creigh.  Probably  that  is  the  slack  season,  and  they  were  not 
quite  up  to  their  capacity,  so  of  the  6,000  that  we  could  have  sold 
if  they  had  been  in,  we  were  running  5,000.  Now,  here  is  Cudahy 
with  9 per  cent.  That  means  5,000  cattle  a week,  at  $100  a head, 
amounting  to  a half  a million  dollars  just  on  our  little  9 per  cent. 
In  other  words,  there  is  $50,000,  more  than  $50,000,  on  every  single 
per  cent  in  there,  and  that  is  just  one  week’s  business.  Now,  if  we 
run  the  9 per  cent  up  to  10  per  cent  we  have  increased  more  than  11 
per  cent  on  our  entire  capacity,  haven’t  we?  The  1 per  cent  is  so 
small  when  compared  with  the  100  per  cent,  but  yet  look  what  it 
does  for  Cudahy  when  you  add  that  1 per  cent;  when  you  add  that 
1 per  cent  of  the  100  per  cent  it  means  10  per  cent  of  Cudahy’s 
business.  When  you  go  from  9 per  cent  up  to  10  per  cent,  that  means 
an  increase  of  1 1 per  cent  for  Cudahy;  it  is  11  per  cent  of  our  business. 
And  yet  as  we  look  at  it  here  it  is  only  1 per  cent,  but  with  all  of 
these  animals  it  means  tens  of  millions  of  dollars  a year.  After  all, 


296 


MEAT  PACKER. 


these  tables  are  simply  like  the  actuarial  tables;  take  the  men  in  this 
room  here  and  when  you  make  up  the  figures  it  doesn’t  seem  so  much, 
but  you  get  into  the  millions,  and  taking  it  year  after  year,  the 
tables  can  not  be  anything  else  than  relatively  stable. 

Mr.  Tincher.  Well,  now,  Mr.  Creigh,  take  this  letter  that  was  read 
here,  written  by  Mr.  Cudahy. 

Mr.  Creigh.  I am  glad  you  bring  that  up,  Mr.  Tincher.  The 
impression  that  you  and  every  one  here  reading  the  Federal  Trade 
Commission  report  get  is  that  we,  the  packers — and  Cudahy  is 
one  of  the  five — have  been  working  on  an  agreed  percentage  of  10 
isn’t  that  it?  During  all  this  period  of  time.  Now  read  that  letter 
of  Mr.  Cudahy’s,  any  of  you,  from  the  standpoint  that  all  the  time 
he  had  an  agreed  percentage.  Why,  the  thing  is  perfectly  obvious 
that  he  hadn’t  any  agreed  percentage.  And  the  testimony  follow- 
ing shows  that  there  wasn’t.  The  figures  there  show  that  there 
isn’t  any  such  thing.  The  figures  show  that  we  are  after  all  that  we 
can  get.  Every  one  of  those  letters,  read  from  the  standpoint  of 
men  who  know  and  understand  the  situation,  and  the  custom,  shows 
that  there  wasn’t  any  such  thing. 

Mr.  Clague.  Well,  Mr.  Creigh,  this  Denver  letter  spoke  of  a fifty- 
fifty  basis. 

Mr.  Creigh.  Why,  I know.  Now  of  course  I am  not  familiar  with 
the  Denver  situation,  but  isn’t  that  a perfectly  natural  thing?  Here 
are  two  packing  houses  out  there  with  relatively  small  receipts, 
a relatively  small  market  and  all  that.  Now  you  have  got  two 
packing  houses  out  there,  two  markets.  What  are  they  going  to  do  ? 
it  may  be  sixty-forty  or  it  may  be  fifty-fifty.  Somebody  is  going  to 
do  about  so  much  business,  and  the  other  fellow  is  going  to  do  about 
so  much  business;  both  houses  have  got  to  run.  Always  at  the  end 
of  the  year  you  will  be  able  to  work  out  a percentage.  You  couldn’t 
have  100  per  cent  one  week  to  Armour  in  Denver,  and  100  per  cent 
the  next  week  to  Swift.  Even  if  you  had  it  that  way  it  would  work 
out  fifty-fifty  at  the  end  of  the  year. 

Mr.  Williams.  What  is  the  meaning  of  this  letter  that  Mr.  Jones 
read,  as  you  understand  it  ? 

Mr.  Creigh.  The  meaning  of  it  ? 

Mr.  Williams.  Yes. 

Mr.  Creigh.  Well,  in  the  first  place,  with  reference  to  percentage, 
the  letter  absolutely  shows  that  there  was  no  percentage  at  the  time. 
Now  then,  the  letter,  as  I recall  it — well,  let  us  just  see  it.  I am  not 
afraid  of  that  letter,  written  10  years  ago. 

Mr.  Jones.  It  is  on  page  55. 

Mr.  Clague.  Read  it,  Mr.  Jones. 

Mr.  Jones.  It  is  in  part  1,  at  the  bottom  of  the  page. 

Mr.  Clague.  Well,  read  it  again,  Mr .*  Jones,  so  that  we  will  all  get 
it. 

Mr.  Creigh.  I will  read  it.  This  letter  was  written  10  years  ago, 
but  that  letter  absolutely  shows  that  there  was  no  percentage. 

Mr.  Clague.  Go  ahead  and  read  it. 

Mr.  Creigh.  All  right.  Now  this  is  a letter  from  Chicago  to  M.  R. 
Murphy.  The  first  paragraph  has  nothing  to  do  with  the  proposi- 
tion. 

Mr.  Clague.  What  is  the  date  ? 

Mr.  Creigh.  June  21,  1911.  Now  this  is  at  the  time  when  we  are 
charged  with  having  a percentage;  it  is  charged  that  we  were  having 


MEAT  PACKER. 


297 


a percentage  of  10.  (Reading)  “When  I was  coming  to  Chicago 
Monday  night  Mr.  R.  C.  Howe  was  on  the  train.  ” 

Mr.  Jones.  That  is  not  the  letter.  It  is  in  Part  1,  page  55,  at  the 
bottom  of  the  page,  dated  November  27,  1911,  and  addressed  to  Mr. 
M.  R.  Murphy,  South  Omaha,  Nebr. 

Mr.  Creigh.  All  right.  [Reading:]  “I  had  a call  from  your  neigh- 
bor to-day” — this  is  addressed  to  our  manager  at  Omaha — “and 
he  agrees  that  we  are  paying  too  much  money  for  hogs  at  Omaha 
and  Sioux  City.  ” 

Mr.  Tincher.  Who  is  his  neighbor  ? Who  does  he  mean  ? 

Mr.  Creigh.  I haven’t  the  slightest  idea.  You  can  take  it  as 
being  Armour  or  Swift  or  Morris.  It  might  be  anybody.  [Contin- 
uing reading:]  “And  that  if  we  could  get  Omaha  right,  of  course, 
it  would  regulate  Sioux  City,  and  he  believes  the  best  plan  would  be 
to  let  other  people  have  what  they  want,  and  then  split  what  is 
left.  I believe  in  this  plan,  and  I would  advise  you  to  work  on  it 
for  this  week,  and  I would  suggest  that  you  either  call  him  on  the 
phone  or  see  him  some  time  to-morrow  and  talk  the  matter  over. 
We  are  killing  a lot  of  hogs,  and  there  isn’t  anything  in  them,  and 
it  is  about  time  that  we  should  be  able  to  buy  them  at  a margin.  ” 

Now  what  bearing  has  that  an  an  agreed  percentage  proposition, 
if  you  please  ? As  a matter  of  fact,  it  shows  there  isn’t  any.  The 
charge  here  that  you  are  all  working  on  is  that  there  has  been  a 
continuous  percentage  right  straight  along  all  the  time. 

Mr.  Tincher.  The  percentages  that  Mr.  Voigt  read  were  those 
that  occurred  after  the  date  of  this  letter. 

Mr.  Creigh.  I beg  your  pardon. 

Mr.  Tincher.  The  percentages  that  Mr.  Voigt  read  occurred  after 
the  date  of  this  letter.  It  seems  that  those  figures,  those  percentages, 
were  after  that  time. 

Mr.  Creigh.  When  we  get  into  the  figures  we  find  there  is  no  per- 
centage there  at  all. 

Mr.  Jones.  One  of  the  big  packers  had  a percentage  that  did  not 
vary  1 per  cent  from  34  all  the  way  through,  in  one  table,  that  I 
noticed. 

Mr.  Creigh.  All  right,  the  bigger  you  get  the  more  your  figures 
are  going  to  remain  about  the  same.  Cudahy  can  wabble  around 
because  he  has  got 

Mr.  Williams  (interposing).  What  is  the  suggestion  in  that  letter 
as  to  letting  the  other  fellows  have  what  they  want?  The  letter 
says:  “And  he  believes  the  best  plan  would  be  to  let  other  people 
have  what  they  want.  ” Now  what  about  that  ? 

Mr.  Creigh.  All  right,  let  us  take  it  at  its  face  value.  Who  are 
the  other  fellows  ? 

Mr.  Williams.  I take  it  that  is  the  additional  buyer. 

Mr.  Creigh.  No;  there  are  four  packers  out  there,  and  he  is  talking 
with  his  neighbor,  whoever  it  is.  Now,  there  are  two  of  them.  Now, 
who  is  the  other  fellow?  The  other  fellow  may  be  Swift  or  Morris; 
we  will  assume  that  it  is  Armour  whom  he  is  talking  about.  I 
haven’t  any  idea.  Now,  then,  there  are  four  of  them  trying  to  buy. 
Now  it  shows  they  can  not  agree.  “We  haven’t  any  agreement  in 
here.”  “Let  us  stay  out  of  the  market,  and  let  them  take  what 
they  want.  ” Now,  where  is  there  any  10  per  cent  or  30  per  cent  in 


298 


MEAT  PACKER. 


that  letter?  It  is  demonstrable  to  me  that  there  isn’t  any  such 
thing. 

Mr.  McLaughlin  of  Nebraska.  Mr.  Creigh,  while  you  are  explain- 
ing these  letters  1 would  like  to  have  you,  if  you  will,  refer  to  the 
letter  on  page  66.  It  speaks  of  the  usual  percentages,  and  uses  the 
code  for  the  packers  instead  of  giving  their  names.  Explain  what 
the  usual  percentages  are  and  what  this  code  is. 

Mr.  Creigii.  Well,  now  that  is  perfectly  simple  when  you  know 
about  it.  It  is  one  of  the  illustrations  of  how  you  can  take  a mole 
hill  and  make  a mountain  out  of  it.  Here  are  some  percentages  that 
were  used  to  cover  some  legislative  and  general  matters.  There  is 
nothing  here  at  all  about  packing-house  business  or  buying  cattle 
or  sheep  or  hogs,  or  selling  of  goods  or  anything.  It  is  perfectly 
obvious  on  the  face  of  it. 

Now,  you  were  talking  about  the  code  part. 

Mr.  McLaughlin  of  Nebraska.  Yes;  what  is  the  use  of  using  the 
code  ? What  is  the  purpose  of  it  ? I wish  you  would  explain  that. 

Mr.  Creigh.  Why,  in  the  packing  business  there  are  certain  initials 
used  to  designate  the  different  people.  When  you  use  “S.  & S.,” 
for  instance,  that  means  Schwarzschild  & Sulzberger.  “S.  ” up  here 
is  Swift;  “A.  ” is  Armour;  “C.  ” is  Cudahy;  “S.  & S.,”  as  I said,  is 
Schwarzschild  & Sulzberger.  Why,  all  our  cattle  men  designate 
them  in  about  the  same  way;  that  is  the  way  it  is  done  in  the  trade; 
that  doesn’t  mean  anything.  There  is  nothing  suspicious  about  it. 
It  is  perfectly  normal  and  rational. 

Now,  just  imagine,  you  men  here  on  the  committee,  what  it  is  that 
has  brought  about  this  great  public  opinion  in  the  United  States,  the 
great  hue  and  cry  of  ‘‘the  packers,”  the  “Beef  Trust,”  and  all  that. 
What  is  the  evidence  of  an  agreement  affecting  all  the  meats  ? Why, 
a little  memorandum  that  Mr.  Veeder  writes  to  Mr.  Traynor,  that  the 
lawyers  in  their  litigation  matters,  in  the  general  litigation  of  the 
trade,  divided  it  up  on  certain  agreed  percentages.  That  is  as  to 
one  man,  and  not  to  anybody  else. 

Now,  here  we  have  the  meat-inspection  act.  Now,  the  packers 
are  under  it.  I was  very  glad  to  hear  Mr.  Taliaferro  testily  here 
yesterday  that  the  packers  did  not  oppose  the  meat-inspection  act 
as  an  act,  but  what  at  the  time  they  were  after  was  what  they  felt 
to  be  the  unfairness  of  loading  upon  them  the  cost  and  the  losses  of 
the  inspection.  All  that  is  past.  We  can  not  fight  that  battle  over 
again.  If  you  knew  the  millions  of  dollars  that  are  dumped  into  the 
tank  on  inspection  and  absorbed  into  the  business  I think  you  would 
agree  with  the  packers  that  it  is  a little  hard  on  them.  Somewhat 
unfair.  However,  that  is  what  we  have  to  stand.  That  is  part  of 
the  gaff  of  the  business. 

Now,  as  to  the  meat-inspection  act,  it  is  a fine  thing.  The  packers 
always  wanted  inspection.  Now,  here  we  will  say  we  have  a yard- 
stick. This  represents  the  whole  act.  There  will  be  36  inches  in 
that  yardstick.  Everybody  is  harmonious  all  the  time.  Perfectly 
easy.  However,  if  you  begin  to  go  to  the  extreme  in  the  enforcement 
of  some  technical  point,  in  one  way,  and  you  get  a critical  fellow  the 
other  way,  when  you  get  out  to  inches  one  and  two  at  each  end  of  it 
you  make  it  pretty  far  apart.  Now,  there  may  be  a lot  of  money 
out  there,  too.  For  example,  the  inspectors  very  properly  are  very 
keenly  interested,  when  they  condemn  stuff,  in  having  it  tanked. 


MEAT  PACKER. 


299 


Now,  the  tanking  would  be  an  entire  loss.  As  I recall  it,  there  were 
times  when,  we  will  say,  fats  either  had  to  be  tanked  or  to  be  dena- 
tured, they  had  to  be  colored  pink.  Now  if  you  color  a fat  pink  you 
could  not  use  it  in  soap.  And  I don’t  know  how  long  it  took  to  get 
the  technical  bureau  oyer  here  away  from  their  pink  business  which 
they  had  in  mind.  In  the  meantime  here  were  perfectly  good  soap 
fats  that  were  being  dumped  in  the  tank,  and  the  packer  was  losing 
his  money,  wasn’t  getting  what  the  stuff  was  worth,  and  the  public 
was  losing  equally  with  him.  Now,  here  was  an  extreme  case 
amounting  to  thousands  of  dollars  which  it  took  months  to  correct. 

Now,  the  packer  hasn’t  any  kick  at  all  on  regulations  within  their 
normal  lines,  but  there  are  so  many,  many  times  that  these  things 
are  done  in  an  extreme  way,  that  he  is  naturally  anxious  to  get 
down  to  where  the  law  is  reasonably  definite,  and  where  he  will  get 
fair  play,  quick  attention,  instead  of  the  governmental  way.  And 
there  are  perfectly  obvious  reasons  for  that.  I don’t  criticize  them. 
But  they  cost  us  money  by  placing  an  expense  on  us,  and  somebody 
has  got  to  pay  for  it. 

Now  we  come  to  another  point  on  this. 

Mr.  Clarke.  Just  a moment.  You  heard  the  Secretary’s  talk  this 
morning,  did  you  ? 

Mr.  Creigh.  Part  of  it,  anyhow. 

Mr.  Clarke.  Would  you  agree  in  letter  and  spirit  with  what  he 
said  on  that  ? Just  a question  of  working  out  the  detail  of  it  ? 

Mr.  Creigh.  Well,  I appreciated  and  approved  very  much  what 
I thought  was  the  general  spirit  of  conservatism  and  so  on  as  ex- 
pressed by  him.  Remember  now,  he  has  been  one  who  has  probably 
been  closer  to  this  subject  in  the  last  10  years  than  anybody  in  the 
room,  working  it  from  the  other  side,  and  he  says  that  the  farther 
he  has  gone  along  the  line  of  investigating  this  the  more  he  begins 
to  wonder  what  it  is  all  about  and  whether  he  has  been  right. 

Mr.  Clarke.  But  he  also  said  that  there  are  some  things  to  be 
remedied. 

Mr.  Creigh.  Very  good.  I wish  you  men  could  appreciate  what 
wonderful  things  there  are  in  what  Mr.  Brown  has  said  to  you  in 
his  statement  about  what  the  live-stock  exchanges,  through  their 
rules  and  regulations,  have  themselves  accomplished,  by  the  elimina- 
tion of  unfair  practices.  And  that  has  been  done  just  through  the 
exchange — the  National  Live  Stock  Exchange.  Now  I was  very 
much  interested  in  what  was  being  said  this  morning,  and  while 
Gen.  Lightfoot  was  talking  I wanted  to  break  in  one  time.  I have 
read  what  you  call  the  Tincher  Grain  Exchange  Bill,  and  along  that 
line  I see  that  you  are  trying  to  put  in  something  in  the  way  of  a 
United  States  Standard  Exchange,  or  something  like  that,  where, 
really,  for  the  operation  of  that  law,  you  try  to  take  the  benefit  off 
an  existing  business  mechanism  to  more  or  less  self -police  the  thing 
and  work  it  out.  That  is  fine.  I think  the  packers  here  welcome 
any  chance  in  the  world  if  we  can  get  away  from  the  bureau  at 
Washington,  and  put  things  at  home,  around  the  exchanges,  where 
everybody  knows  about  it,  where  we  can  get  prompt  treatment  in 
matters  that  need  correction,  where  we  can  correct  grievances  where 
there  are  such.  Everybody  wants  to  correct  them  and  have  a record, 
right  and  proper,  without  having  to  hear  5 or  10  years  afterwards 
of  a lot  of  alleged  agreements  which  are  not  so. 


300 


MEAT  PACKER. 


Now  there  is  wonderful  machinery  possible  in  the  way  of  exchanges. 
That  is  the  way  all  the  business  in  the  world  is  done,  really.  Now, 
before  you  had  any  live-stock  exchange,  where  the  commission  men 
get  together  and  make  fair  business  trading  rules,  you  probably  did 
not  have  the  honesty  or  the  certainty  of  getting  back  your  money, 
you  live-stock  shippers,  that  you  do  now.  Now  you  take  the  money, 
you  are  glad  to  get  it ; the  practice  is  right,  but  while  we  are  doing  it, 
let  us  not  forget  that  there  have  been  years  of  experience  and  effort 
and  trading  custom  and  standardizing  behind  all  this,  and  the  raising 
of  business  practices  up  to  this  point,  and  the  business  men  themselves 
have  been  doing  it. 

Mr.  Clarke.  Your  talk  is  right  in  agreement  with  the  Secretary’s 
thought. 

Mr.  Creigh.  Well,  now,  there  is  the  machinery.  Now  if  we  can 
get  practical  business  men  to  work  it  out,  to  give  us  the  supervision 
in  there  so  that  things  are  not  done  wrong,  why  everybody  will 
welcome  it. 

Mr.  Tincher.  What  do  you  mean  by  that  ? Let  us  see  if  I under- 
stand you.  Do  you  mean  that  you  would  be  willing  for  a law  to  be 
passed  that  would  have  the- Secretary  of  Agriculture  designate  you  as  a 
packing  plant,  and  that  you  would  furnish  your  rules  and  regulations 
and  report  your  system  to  him  before  you  are  designated,  and  he 
would  have  the  power  to  cause  your  designation? 

Mr.  Creigh.  If  you  substitute  “exchange”  for  “a  packing  plant,” 
I think  I would  go  pretty  nearly  with  you. 

Mr.  Tincher.  The  grain  exchange  has  got  power  over  the  grain 
dealer. 

Mr.  Creigh.  Well,  let  Mr.  Brown  explain  to  you  the  power  that 
the  live-stock  exchange  has  over  the  commission  man. 

Mr.  Tincher.  I understand  that,  but  let  us  see  how  much  power 
they  have  over  the  packer. 

Mr.  Creigh.  Well,  let  us  put  the  packer  in  the  exchange,  and  make 
them  subject  to  the  fair  exchange  trading  rules.  They  don’t  like  this 
manipulation,  the  South  St.  Paul  situation.  Get  people  on  the 
ground  that  know  the  business  and  have  an  ordinary  grievance 
committee. 

Mr.  Tincher.  I have  read  the  Haugen  bill,  and  Mr.  Williams  has 
introduced  a bill  which  I have  been  reading  this  afternoon.  It  is 
along  that  line.  I don’t  know,  the  business  is  not  exactly  alike,  but 
both  of  those  bills  have  a tendency 

Mr.  Creigh  (interposing) . Let  me  show  you  the  difference  between 
them.  Now,  here  is,  we  will  say,  the  McLaughlin  bill,  and  this  is  not 
aimed  at  you,  particularly,  Mr.  McLaughlin,  when  I refer  to  the 
McLaughlin  bill,  but  that  is  the  one  I have  the  best  in  mind.  There 
you  have  a long  list  of  general  things  that  are  hereby  made  illegal. 
Now,  a shipment  of  cattle  comes  in,  and  for  some  reason  or  another 
suppose  the  packer  has  not  treated  them  quite  fairly  at  South  Omaha 
to-day.  Now,  under  my  system  I would  have  a grievance  com- 
mittee in  an  exchange  out  there,  made  up  in  a representative  way  by 
the  commission  men  and  the  Government  officials  and  packers,  so 
that  anybody  who  has  a grievance  can  take  it  up  right  there  and 
have  the  matter  determined  immediately. 

Now,  what  is  the  McLaughlin  bill  machinery  ? Now,  here  is  about 
what  it  is:  Somebody  in  10  days  or  a month  might  write  a letter  down 


MEAT  PACKER. 


301 


here  to  Washington.  Some  time  after  it  has  gone  through  various 
steps  an  inspector  comes  out  there,  and  he  wants  to  know  what  one 
of  our  buyers  did  at  some  time  back.  The  fellow  might  not  now  be 
in  our  employ.  We  make  the  best  report  we  can,  and  nine  months 
later  a formal  complaint  is  made.  Now,  that  transaction  is  all  over 
with.  It  has  been  completed  long  ago.  Here  comes  the  complaint, 
and  with  it  the  publicity,  the  charges  of  unfair  practices  and  every- 
thing else,  and  in  a year  or  so  afterwards  we  are  ordered  to  desist 
from  doing  something  that  we  never  did  before  or  never  have  done 
since.  And  I am  not  putting  a hypothetical  case.  I have  got  one 
thing  in  mind  now  where  exactly  that  thing  has  taken  place.  Why,  it 
is  past  months  ago,  and  yet  we  are  in  the  grind  of  a tremendous,  big 
machinery  that  makes  us  desist  from  something  that  months  before 
the  complaint  was  filed  we  had  ceased  doing.  Yet  that  is  the  way 
it  works.  Now,  imagine  practical  business  men  trying  to  do  business 
efficiently,  quickly,  fast,  when  you  have  to  monkey  with  that  sort  of 
Government  machinery.  Put  it  right  into  the  yards.  Every 
packer  would  be  with  you. 

Mr.  Tincher.  Well,  I am  glad  to  hear  you  say  that  all  the  packers 
will  be  with  us  in  some  law.  I had  always  understood  that  they 
were  opposed  to  everything. 

Mr.  Creigh.  Of  course,  I don’t  know  how  it  is  that  all  these 
understandings  are  had.  You  say  “I  have  always  understood.”  I 
don’t  know  where  all  these  understandings  originate. 

Mr.  Tincher.  I will  tell  you  where  mine  originated:  From  reading 
the  hearings  before  I came  to  Washington,  and  from  listening  to 
evidence  after  I came  here. 

Mr.  Creigh.  But  everybody  has  been  fighting  these  things  and 
saying  these  things  won’t  do  any  good. 

Mr.  Tincher.  Well,  here  is  a sample  of  the  attitude  we  have  had 
on  these  questions:  A distinguished  gentleman  testified  yesterday, 
and  he  was  very  enthusiastic  in  his  statement  as  to  the  proper  way 
to  handle  the  question:  his  method  of  solving  the  question  was  to 
strike  out  all  after  the  enacting  clauses. 

Mr.  Creigh.  Well,  of  course  that  is  one  way  of  doing  things,  as 
we  laughed  over  the  thing  together,  but  have  I ever  taken  such  a 
position  as  that? 

Mr.  Tincher.  No;  you  have  never  taken  such  a position  as  that, 
but  that  has  been  the  general  tendency  in  the  testimony  before  these 
committees  since  I have  been  here  hearing  the  testimony,  and  as  I 
have  gathered  from  reading  it  before  I was  here. 

Mr.  Creigh.  Well,  let  us  look  at  it  from  two  angles.  If  I came 
across  here  right  now  and  put  up  a bill  to  the  committee  that  I 
thought  was  pretty  good  and  practical,  and  if  I had  every  packers’ 
indorsement  of  it,  I am  afraid  that  a lot  of  you  would  figure  this  way: 
“Well,  we  have  got  to  do  something  different  from  that.”  You  and 
I have  laughed  around  here  together  so  much  about  the  bill  that  we 
were  going  to  draw  up,  but  I will  say,  Mr.  Tincher,  that  I will  write 
a dandy  bill  for  you,  it  will  be  fine,  it  will  be  practical,  and  you  can 
have  your  name  on  it,  and  I will  write  the  bill. 

Mr.  Tincher.  We  have  had  so  many  good  bills  prepared  already 
that  I don’t  think  it  necessary. 

Mr.  Creigh.  Well,  let  us  make  a better  one.  We  can  do  it. 


302 


MEAT  PACKER. 


Mr.  Tinoher.  Well,  if  we  go  at  it  in  that  spirit  we  will  be  able  to 
have  a good  bill,  a bill  that  will  be  fair  and  effective,  and  I think  the 
country  will  benefit  b}r  it. 

Mr.  Creigh.  Go  on,  I welcome  a bill  made  in  such  a spirit.  And, 
as  I say,  I think  nearly  every  other  packer  will  do  the  same  thing. 

Mr.  Tincher.  I ask,  Mr.  Chairman,  that  the  bill  that  the  gentleman 
is  going  to  prepare  to  cover  this  he  made  a part  of  these  hearings  and 
inserted  at  this  point. 

Mr.  Creigh.  I don’t  hear  the  motion  to  adopt  it,  however. 

Mr.  Tincher.  I think  every  member  of  the  committee  would  like 
to  see  it. 

Mr.  Clarke.  Well,  the  suggestion  was  made  this  morning  to  see  if 
these  gentlemen  could  not  combine  and  present  a suggestion  along 
this  line. 

Mr.  Kincheloe.  Mr.  Chairman,  I think  we  ought  to  get  along  with 
this  witness  that  is  on  the  stand. 

The  Chairman.  Mr.  Brown,  I understand  that  you  have  to  leave 
soon.  I desire  to  ask  this  question.  I understood  you  to  say  that 
the  market  agencies  in  the  stockyards,  the  exchanges  in  the  stock- 
yards,  preferred  to  be  under  the  Interstate  Commerce  Commission. 

Mr.  Brown.  Yes. 

The  Chairman.  Will  you  kindly  go  into  detail  a little  more  on 
that,  Mr.  Brown  ? 

Mr.  Brown.  I am  instructed  by  the  exchanges  to  say  that  of  the 
bills  that  have  been  under  consideration,  they  consider  the  so-called 
Haugen  bill  the  fairest  bill  for  all  concerned  that  has  been  presented. 
They  particularly  like  the  feature,  I believe,  that  they  would  be 
accorded  fairer  treatment  under  the  Interstate  Commerce  Commission 
than  they  would  under  the  other  commissions. 

I listened  to  the  Secretary  of  Agriculture  this  morning,  and  I 
want  to  say  that  I thought  that  most  of  his  remarks  on  this  situa- 
tion were  very  fair.  I would  not  say  that  it  would  not  be  for  the 
best  interests  of  the  trade — personally,  and  I am  speaking  now  for 
myself— to  have  this  industry  under  one  control,  if  it  has  got  to  be 
controlled.  For  instance,  if  it  should  be  the  Interstate  Commerce 
Commission,  or  if  it  should  be  the  Department  of  Agriculture,  I can 
see  where  the  multiplicity  of  Government  employees  that  might  be 
occasioned  to  watch  different  branches  of  the  industry,  the  stock 
yards  and  commission  men  on  the  one  side  by  the  Interstate  Com- 
merce Commission,  and  the  packers  on  the  other,  by  the  Depart- 
ment of  Agriculture,  would  cause  increased  expense  by  the  Govern- 
ment, and  it  might  be  an  economic  proposition  that  should  be  fav- 
ored by  all  of  us  for  the  good  of  the  Government  to  have  it  under 
one  commission. 

But  up  to  the  time  of  the  discussion  that  I heard  this  morning  I 
felt  that  perhaps  the  Interstate  Commerce  Commission  was  the 
commission  that  should  handle  our  particular  line  of  business, 
which  is  largely  involved  in  interstate  commerce.  And  I think 
that  I expressed  that  to  you  before,  Mr.  Chairman. 

The  Chairman.  Yes. 

Mr.  Brown.  Now  there  is  another  matter  that  has  been  brought 
up  here.  We  have  been  under  the  Department  of  Agriculture  and 
the  Bureau  of  Markets  have  so-called  control  and  supervision  over 
us.  They  did  not  function.  We  caught  two  bare-faced,  red- 


MEAT  PACKER. 


303 


handed  crooks  on  the  Chicago  market  that  were  absolutely  confessed 
criminals.  The  Department  of  Agriculture,  through  its  account- 
ing department  of  the  Bureau  of  Markets,  found  those  men,  found 
through  their  examination  that  they  were  crooked.  Within  two 
weeks  after  this  was  found  out  the  Chicago  Live  Stock  Exchange, 
of  which  I was  president  at  the  time,  expelled  both  of  those  parties. 
The  Bureau  of  Markets  in  the  Department  of  Agriculture,  through 
its  licensing  control,  have  not  suspended  or  expelled  them  since,  nor 
at  any  time.  I brought  that  out  with  Mr.  Tincher.  Mr.  Tincher 
has  heard  me  bring  that  up  before.  I think  you  have,  too.  I 
stated  that  before  the  Senate  committee  under  the  Gronna  bill. 
Exchanges  operate  quickly.  Governmental  bureaus  and  depart- 
ments do  not  operate  within  six  months  to  a year,  if  they  operate 
at  all.  I don’t  know  why.  Perhaps  some  of  you  gentlemen  can 
tell  me. 

Mr.  Ten  Eyck..  Along  what  lines  were  they  crooked  ? Tell  us 
that  in  just  a word. 

Mr.  Brown.  Well,  for  instance,  one  concern  would  sell  a drove 
of  cattle  at  $12.15  per  hundred;  they  would  make  their  return  to 
the  shipper  $12,  and  keep  the  15  cents  per  hundred.  The  other 
concern  added  on  to  their  feed.  For  instance,  they  gave  3 bushels 
of  corn  to  a load  of  hogs,  and  just  as  an  example,  they  would  charge  5, 

Now,  those  concerns  were  promptly  expelled  and  were  put  out  of 
business,  and  have  been  unable  to  get  back  into  business  since. 

Mr.  Tincher.  I don’t  just  understand  you,  Mr.  Brown.  Now, 
what  is  it  that  the  Bureau  of  Markets  has  not  functioned  in  ? 

Mr.  Brown.  The  Bureau  of  Markets,  through  their  accounting 
department,  discovered  that  irregularity.  The  accounting  depart- 
ment reported  it  in  to  the  Bureau  of  Markets  at  the  same  time  that 
they  reported  it  to  the  exchanges.  The  exchanges,  I think,  in  one 
instance,  expelled  a man  inside  of  a week,  and  in  the  feed  instance, 
after  an  examination,  they  expelled  them  within  two  weeks. 

Mr.  Tincher.  Well,  what  action  would  be  necessary  for  the  bureau 
to  take  afterwards? 

Mr.  Brown.  Revoke  the  license  which,  under  the  Lever  Act, 
would  have  made  them  discontinue  business. 

Mr.  Tincher.  I wanted  to  know  if  they  abandoned  that  through 
neglect,  or  if  they  took  it  that  your  action  was  sufficient.  That 
action  of  yours  barred  them  from  doing  business.  Your  own  action 
put  them  out  of  business,  did  it  not  ? 

Mr.  Brown.  Well,  I will  tell  you  about  that.  In  the  case  of  the 
concern  that  was  crooked  on  feed  they  made  a stipulation  with  that 
concern,  through  the  chief  of  the  department,  Mr.  Brand,  that  if  that 
concern  would  return  $20,000  to  its  customers,  they  would  allow  them 
to  continue  business.  Notwithstanding  that  stipulation  with  the 
department,  the  Chicago  Live  Stock  Exchange  expelled  them. 

Mr.  Tincher.  They  had  friends  at  court  down  here,  those  fellows 
did.  There  was  some  very  serious  criticism  of  the  Bureau  of  Markets 
for  reporting  them,  don’t  you  recall? 

Mr.  Brown.  Yes. 

Mr.  Tincher.  And  every  influence  brought  to  bear  that  certain 
parties,  Members  of  Congress,  could  bring  to  bear  to  have  them 
reinstated  on  the  exchange. 

Mr.  Brown.  Well,  should  a crook  have  any  friends  down  here  in 
Washington,  Mr.  Tincher? 


304 


MEAT  PACKER. 


Mr.  Tincher.  No;  but  I would  not  want  to  say  that  the  man  who 
was  so  interested  in  them  here  and  worried  you  so  much  about  that 
was  actuated  by  improper  motives.  I don’t  know.  I felt  like  you 
did,  that  the  Bureau  of  Markets  were  subject  to  certain  criticism  for 
their  failure  to  act  in  that  matter.  However,  the  Government 
investigation  and  report  did  result  in  a great  deal  of  good,  even  if 
you  had  to  do  it  youself. 

Mr.  Brown.  That  is  what  I pointed  out  in  my  statement,  and  I 
believe  the  only  good  that  I can  recollect  that  did  happen  by  Gov- 
ernment supervision  was  the  examination  of  accounts.  I believe 
that  is  an  act  similar  to  the  banking  act. 

Mr.  Clarke.  Do  you  think  that  in  case  of  differences  developing 
in  the  stock  yards  that  a board  of  arbitration,  or  some  body  can 
quickly  decide  on  those  things,  and,  if  necessary,  the  reports  be  made 
in  permanent  form  for  future  reference  ? 

Mr.  Brown.  I think  that  is  a good  thing,  and  that  is  a function  of 
the  arbitration  committee  of  each  exchange  in  the  country,  Mr. 
Congressman.  They  are  doing  that. 

Mr.  Clarke.  How  many  of  these  differences  do  you  develop  in 
here?  That  is,  just  roughly. 

Mr.  Brown.  Well,  I should  imagine  in  the  Chicago  exchange  there 
are  probably  complaints  that  will  run  from  three  to  five  a month. 

Mr.  Clarke.  Well,  that  would  represent  a percentage,  in  round 
numbers,  of  what?  I have  no  idea  of  your  transactions. 

Mr.  Brown.  Oh,  it  would  not  be  one  one-hundredth  of  1 per  cent 
of  the  transactions. 

Mr.  Clarke.  One  one-hundredth  of  1 per  cent? 

Mr.  Brown.  No,  sir. 

The  Chairman.  As  commission  men  do  you  come  in  frequent 
contact  with  the  Interstate  Commerce  Commission  ? 

Mr.  Brown.  Well,  only  in  connection  with  railroad  rates,  Mr. 
Haugen. 

The  Chairman.  What  has  been  your  experience  with  the  Inter- 
state Commerce  Commission?  I just  wanted  to  make  it  clear  what 
is  your  choice  now.  And  what  is  your  reason  for  it. 

Mr.  Brown.  Our  experience  with  the  Interstate  Commerce  Com- 
mission is  that  they  have  been  eminently  fair.  I think  that  in  the 
majority  of  cases  where  contentions  have  been  brought  up  by  the 
commission  men  and  the  farmers,  they  have  won  out.  That  is,  the 
commission  man  has  won  out  in  his  contention  in  75  per  cent  of  the 
cases,  and  we  find  that  they  are  as  fair  a commission  as  we  could  ask. 

The  Chairman.  Well,  this  matter  has  been  discussed  from  time 
to  time,  and  I don’t  know  as  anybody  has  any  special  interest  in  it, 
but  if  there  are  any  choices  will  you  kindly  state  them,  and  the  matter 
will,  of  course,  be  given  consideration.  As  you  are  the  only  one 
here  to  be  affected  by  it,  that  is  representing  the  stockyards  and 
commission  men,  I would  like  to  have  your  opinion  about  it. 

Mr.  Brown.  Well,  as  I said,  before  I heard  the  Secretary  speak 
this  morning  I was  very  firmly  convinced  that  the  Interstate  Com- 
merce Commission  should  handle  the  cases,  as  far  as  our  end  of  it 
was  concerned,  but  I can  see,  in  these  days  when  taxation  is  being 
multiplied  by  leaps  and  bounds,  in  every  State  in  the  country  taxa- 
tion is  piling  up,  and  in  the  municipalities  the  same  way,  and  in  the 
Government  you  men  find  here  that  you  are  asked  to  pile  up  taxes 


MEAT  PACKER, 


305 


on  the  people — I think  that  any  fair-minded  man  must  see  that 
from  an  economic  standpoint,  that  perhaps  the  proposition  should 
put  all  of  the  industry  under  one  control. 

Mr.  Tincher.  Well,  to  do  that  you  eliminate  the  Interstate  Com- 
merce Commission  entirely,  because  it  would  not  be  fair  to  them  to 
give  them  any  more  than  the  part  that  is  directly  related  to  trans- 
portation. 

Mr.  Brown.  Well,  I guess  they  are  swamped  now,  Mr.  Congressman. 

Mr.  Tincher.  Yes.  It  would  not  be  fair  to  put  the  packer  control 
on  them. 

Mr.  Ten  Eyck.  Your  answer  then  would  mean  either  a new 
commission  or  the  Secretary  of  Agriculture. 

Mr.  Brown.  Well,  I prefer  the  Secretary  of  Agriculture.  I don’t 
think  that  any  new  commission  would  get  to  first  base. 

Mr.  Tincher.  They  would  get  their  salaries. 

Mr.  Brown.  And  that  is  about  all  the  most  of  them  care  about, 
I guess. 

Mr.  Lightfoot.  In  view  of  the  fact  that  you  have  been  asked 
about  this,  I would  like  to  ask  you  this:  I understand  from  your 
remarks  then,  Mr.  Brown,  that  if  the  committee  in  selecting  the 
agency  to  enforce  the  bill,  should  select  the  Secretary  of  Agriculture, 
that  you  personally  see  no  objection  to  that? 

Mr.  Brown.  I would  not.  I think  the  Secretary  of  Agriculture 
would  treat  us  fairly. 

The  Chairman.  Any  further  questions  ? 

Mr.  Gernerd.  Just  let  me  ask  you  a question.  This  is  not  just 
on  this  subject.  We  have  been  hearing  so  much  about  this  spread. 
Isn’t  it  a fact  that  the  packers  made  a considerable  amount  of  their 
profit  out  of  the  by-products  from  the  steers  and  hogs  that  they  killed  ? 

Mr.  Brown.  Yes,  I think  that  that  was  one  of  the  most  lucrative 
parts  of  their  business. 

Mr.  Gernerd.  And  that  now  that  those  by-products  are  in  many 
instances  not  having  any  immediate  demand,  there  is  no  market  for 
them,  therein  lies  the  loss  of  profit  in  the  packing  business  in  the  last 
year  and  a half  ? 

Mr.  Brown.  I think  that  is  very  true.  I think  the  fact  that  they 
have  been  unable  to  sell  their  hides,  that  they  have  been  unable  to 
sell  their  wool — I think  some  of  them  have  hides  and  wool  in  their 
warehouses  that  they  have  had  there  now  for  nearly  a year — that 
they  have  got  to*  protect  themselves  on  the  prices  of  the  stuff  they 
do  sell. 

Mr.  Gernerd.  And  aren’t  there  many  instances  where  the  meats 
were  sold  for  less  than  actual  cost,  and  that  they  were  really  carried 
through  on  the  profits  made  by  the  by-products  ? 

Mr.  Brown.  I think  if  you  will  ask  that  question  of  any  one  of  the 
packers  they  could,  from  their  statistics,  show  where  they  have 
operated  the  slaughter  of  cattle  and  hogs,  and  the  sale  of  the  meat 
and  the  pork  at  a loss  for  weeks  and  months  at  a time,  having  in 
mind  all  the  time  that  they  could  do  that  because  the  profit  on  their 
by-products  would  protect  them. 

Mr.  Gernerd.  What  gets  me  is  that  the  packers  have  never  let 
the  public  really  in  on  the  actual  facts,  and  permitted  the  public 
to  be  misled  on  the  prices  of  meats. 

46985—21 20 


306 


MEAT  PACKER. 


Mr.  Clarke.  Do  you  mean  an  educational  campaign  ? 

Mr.  Gernerd.  Certainly.  I don’t  see  why  they  have  not  indulged 
in  it.  They  are  getting  the  blame  for  it,  and  the  dealer  and  butcher 
are  taking  advantage  right  along  the  line. 

Mr.  Brown.  I think  the  packers  have  adopted  a policy  during  the 
last  year  of  publishing  the  prices  from  week  to  week. 

Mr.  Gernerd.  But  you  don’t  see  the  editorials  in  the  newspapers 
that  gee  with  the  things  that  are  published. 

Mr.  Brown.  The  public  doesn’t  understand. 

Mr.  Gernerd.  They  don’t.  I am  giving  it  to  you  as  I find  it  in 
my  own  district. 

Mr.  Brown.  Mr.  Chairman,  if  you  will  permit  I will  ask  the  secre- 
tary of  the  National  Live  Stock  Exchange  to  read  some  dispatches 
here  which  have  been  received  from  five  or  six  of  the  principal  markets 
regarding  the  legislation  which  is  proposed.  I would  like  to  have 
read  into  the  records  these  dispatches,  and  the  secretary,  Mr.  Boyd, 
will  do  so.  Mr.  Boyd  has  been  in  the  railroad  service,  the  live-stock 
end  of  it,  for  the  last  10  years,  and  if  you  have  any  questions  to  ask 
him  relative  to  the  railroad  end,  the  interstate  commerce  end,  and 
the  functioning  of  the  railroads  in  connection  with  the  live-stock 
transportation,  he  can  answer  them  from  an  expert’s  standpoint:  I 
will  ask  that  you  hear  Mr.  Boyd. 

The  Chairman.  We  will  be  glad  to  do  so. 

Mr.  Brown.  And  may  I be  excused  ? 

The  Chairman.  Yes;  unless  there  are  some  further  questions  to  be 
asked  of  you,  that  will  be  all.  Thank  you. 

STATEMENT  OF  J.  S.  BOYD,  SECRETARY  OF  THE  NATIONAL 
LIVE  STOCK  EXCHANGE,  CHICAGO. 

Mr.  Boyd.  My  name  is  J.  S.  Boyd,  and,  as  Mr.  Brown  said,  I am 
secretary  of  the  National  Live  Stock  Exchange.  I will  read  these 
telegrams. 

This  is  a telegram  from  Sioux  City,  Iowa,  dated  May  4.  [Reading:] 

Everett  C.  Brown, 

President  National  Live  Stock  Exchange, 

fej  Hotel  Willard,  Washington,  D.  C.: 

Our  exchange  wired  for  a hearing  on  the  Norris  bill  last  week.  If  same  be  granted 
request  you  to  represent  us.  We  are  and  have  been  opposed  to  having  live-stock 
exchanges  and  their  members  entangled  in  banker  and  stockyards  legislation,  their 
business  being  entirely  foreign  to  that  of  the  exchanges,  and  because  we  believe  the 
exchanges  are  amply  able  to  protect  the  producer  in  the  appraisement  and  sale  of  live 
stock.  The  Sioux  City  Live  Stock  Exchange  has  been  so  protecting  shippers  to  this 
market  for  38  years  and  are  still  able  to  do  so  with  all  the  effect  of  the  law,  except 
that  we  are  not  able  to  make  a complete  examination  of  the  private  records  of  its 
members,  and  we  have  no  objection  to  regulation  in  that  one  particular.  If  the 
producers  are  to  be  saved  from  complete  ruin,  this  agitation  must  be  stopped.  Prices 
and  feeding  conditions  are  in  bad  shape,  due  we  firmly  believe,  in  large  measure,  to 
the  continued  wrangling  of  the  past  three  years. 

We  respectfully  request  Congress  to  stop  injuring  the  live-stock  industry  by  con- 
stantly introducing  such  class  legislation  as  this  proposed  bill. 

W.  J.  Downey, 

President  Sioux  City  Live  Stock  Exchange. 


MEAT  PACKER. 


307 


Here  is  another  telegram  dated  May  4,  from  South  St.  Joseph,  Mo. 
[Reading :] 

Everett  C.  Brown, 

President  National  Live  Stock  Exchange , 

The  New  Willard  Hotel , Washington , D.  C.: 

The  South  St.  Joseph  Live  Stock  Exchange,  organized  23  years  ago,  are  at  this  time 
and  always  have  been  opposed  to  Federal  legislation  affecting  the  live-stock  and 
packing  industry  as  unnecessary  and  class  legislation.  We  feel  that  the  constant 
agitation  for  Federal  control  of  the  live-stock  and  packing  business  has  already  exerted 
a very  disastrous  effect  on  the  live-stock  markets,  which  have  broken  down  prices  to 
a level  which  are  ruinous  to  live-stock  feeders  and  raisers.  We  believe  that  this 
industry  needs  a rest  rather  than  more  legislation,  and  appeal  to  Congress  to  stop 
further  agitation. 

South  St.  Joseph  Live  Stock  Exchange, 
By  Geo.  H.  Damsel,  President. 

Here  is  another  telegram  from  National  Stock  Yards,  111.,  dated 
May  4.  [Reading:] 

Everett  C.  Brown, 

President  National  Live  Stock  Exchange , 

New  Willard  Hotel,  Washington,  D.  C.: 

The  St.  Louis  Live  Stock  Exchange  is  unalterably  opposed  to  Government  legie* 
lation  of  the  live-stock  industry  for  the  reasons  that  it  is  absolutely  unnecessary  and 
is  class  legislation.  Regulatory  measures  favorable  to  the  producer  in  selling  his  live 
stock  have  always  governed  our  transactions  since  our  existence,  covering  35  years, 
with  all  the  effect  of  this  law,  excepting  that  portion  requiring  examination  of  our 
private  records,  and  the  latter  is  not  objectionable  to  us.  We  have  consistently 
opposed  this  class  of  legislation  for  some  three  years,  believing  that  supply  and  demand 
should  again  be  given  a chance  to  function  unhampered  by  Government  boards  and 
commissions.  We  deny  that  this  is  a bill  to  encourage  the  production,  sale,  and 
distribution  of  live  stock  and  its  products.  Farmers  are  now  marketing  live  stock  at 
prices  that  are  ruinously  low,  and  for  many  of  them  it  means  bankruptcy  and  ruin. 
Constant  agitation  is  in  a measure  responsible  for  the  conditions.  We  demand  in 
behalf  of  the  producer,  whose  agent  we  are,  that  this  constant  agitation  cease. 

H.  B.  Carson,  President. 

Here  is  a telegram  from  South  Omaha,  Nebr.,  dated  May  4. 
[Reading  :J 

Everett  C.  Brown, 

President  National  Live  Stock  Exchange , 

Care  New  Willard  Hotel,  Washington,  D.  C.: 

This  will  authorize  you  to  state  the  position  of  the  Omaha  Live  Stock  Exchange 
on  so-called  packer  and  live-stock  legislation  about  as  follows:  The  live-stock  industry 
of  this  country  as  a whole  is  now  going  through  the  worst  period  in  its  existence.  We 
feel  that  the  continued  agitation  for  Government  regulation  and  the  constant  suspicion 
under  which  the  marketing  of  live  stock  lias  been  handled  for  the  past  few  years  is 
largely  chargeable  with  the  feeling  of  unrest  throughout  the  country,  both  on  the 
part  of  the  producers  and  consumers,  and  that  the  instability  of  the  industry  at  the 
present  time  is  largely  chargeable  to  this  constant  agitation.  Suspicion  cast  upon  any 
industry,  constantly  reiterated,  can  not  help  having  a disastrous  effect.  Our  ex- 
change has  never  objected  to  the  closest  scrutiny  of  its  methods  by  any  duly  authorized 
department  of  the  Government.  It  does  not  object  to  such  scrutiny  now,  be  it  ever 
so  thorough.  It  does  object  to  Government  bureau  controlling  its  activities  for  the 
reason  that  ever  since  the  organization  of  our  exchange  in  1889,  one  of  its  main  objects 
has  been  the  protection  of  the  producer,  the  safeguarding  of  his  interests  in  every 
respect,  and  the  building  up  of  a feeling  of  confidence  betv  een  the  producer  and  his 
representatives  on  the  public  market,  the  commission  men,  members  of  our  organiza- 
tion. 

Our  constant  endeavor  has  been  to  promote  a feeling  of  harmony  and  security  on 
the  part  of  the  producer.  This  feeling  has  been  shaken  by  constant  agitation  and 
assertion  on  the  part  of  Government  representatives  that  shippers’  interests  were  not 
protected.  Our  hope  is  that  Congress  will  do  something  constructive  at  this  time, 
something  which  will  reduce  discontent  and  promote  harmony  and  confidence  in  the 
marketing  of  live  stock  at  public  markets.  If  this  may  be  achieved  the  producer  will 


308 


MEAT  PACKER. 


continue  the  production  of  meat-food  animals.  Without  a return  of  confidence  pro- 
duction will  be  materially  reduced  in  the  very  near  future.  Class  legislation  appears 
as  the  only  designation  for  efforts  of  this  kind.  We  have  been  and  are  now  decidedly 
opposed  to  such  legislation,  believing  that  the  best  interests  of  the  producer  can  be 
best  conserved  by  a cessation  of  such  legislation. 

Omaha  Live  Stock  Exchange, 
By  Will  H.  Wood,  President. 

The  next  is  a telegram  from  U.  S.  Yards,  Indianapolis,  Ind.,  May  5, 
1921.  [Reading:] 

Everett  C.  Brown. 

President  National  Live  Stock  Exchange , 

Willard  Hotel,  Washington,  D . C.: 

We  regard  Federal  regulation  of  this  economic  industry  as  being  unnecessary  and 
class  legislation.  We  do  now  and  always  have  opposed  same.  For  the  past  35  years 
we  have  exerted  and  enforced  regulatory  measures  favorable  to  producers  and  shippers 
of  live  stock,  thereby  insuring  fair  market  values  and  proper  handling  at  destination. 
Legislative  provision  for  examining  of  private  records  of  our  business  transactions 
would  not  be  objectionable.  Our  opinion  that  constant  agitation  on  this  subject 
during  past  three  years  is  largely  responsible  for  enormous  shrinkage  in  values  of  live 
stock  and  disastrous  and  ruinous  effect  on  producers.  Congress  should  stop  this 
crusade  against  farmers  and  at  least  attempt  something  that  might  help  them. 

Horace  H.  Fletcher, 
President  Indianapolis  Live  Stock  Exchange. 

And  then  we  have  a telegram  from  the  Union  Stock  Yards,  Chicago, 
dated  May  4.  [Reading:] 

E.  C.  Brown, 

President  National  Live  Stock  Exchange, 

New  Willard  Hotel,  Washington,,  D.  C.: 

The  Chicago  Live  Stock  Exchange  is  now  and  always  has  been  opposed  to  Federal 
legislation  of  this  economic  industry  as  unnecessary  and  class  legislation.  The 
exchange  has  exerted  regulatory  measures  favorable  to  the  producer  in  the  appraise- 
ment and  sale  of  live  stock  since  its  existence,  covering  37  years,  with  all  of  the  effect 
of  law  in  every  particular,  excepting  one,  that  being  the  entire  examination  of  pri- 
vate records  of  its  members,  and  regulation  in  that  particular  would  not  be  objec- 
tionable to  us.  We  have  criticized  proposed  legislation  on  many  grounds.  One  which 
seems  vital  to  us  in  the  interests  of  the  live-stock  industry  is  that  most  bills  fail  to 
segregate  the  commission  men,  who  are  the  direct  personal  representatives  of  the 
producer,  from  the  packer.  Commission  men  in  the  pursuit  of  their  business,  work- 
ing for  the  best  interests  of  the  producer,  naturally  must  at  all  times  be  alert  to  the 
general  interest  of  the  producer  and  diametrically  oppose  the  packers  and  other 
buyers  on  all  trading  points  wherein  the  producer  is  interested.  In  the  best  inter- 
ests of  live-stock  producers  Congress  should  not  delay  in  disposing  of  this  legislation, 
the  agitation  for  which  during  the  past  five  years  has  seriously  menaced  production 
and  marketing.  A finality  in  the  immediate  enactment  of  some  regulatory  measure 
or  its  complete  abandonment  is  seriously  needed  by  the  animal  husbandry  of  this 
country. 

The  Chicago  Live  Stock  Exchange. 

The  Chairman.  Do  you  care  to  comment  on  any  of  those,  or  have 
you  any  suggestions  that  you  care  to  make  ? 

Mr.  Boyd.  Well,  nothing  except  perhaps  to  say  that  for  the  past 
10  years  I have  been  with  one  of  the  largest  live-stock  moving  rail- 
roads in  the  West,  in  the  live-stock  department.  I have  come  in 
close  personal  contact  with  the  great  majority  of  our  shippers. 
And  I have  heard  most  of  their  complaints.  I have  been  in  con- 
stant contact  with  the  commission  men.  Have  been  on  the  markets. 
In  starting  in  there  I realized  that  I should  learn  the  commission 
business,  the  way  it  was  conducted.  I know  the  stockyards  game. 
I have  put  in  a great  deal  of  time  on  the  Kansas  City  market,  the 
second  largest  in  the  world  and  I know  what  the  practices  and  cus- 
toms have  been  there. 


MEAT  PACKER. 


309 


We  have  had  to  sell  a great  many  cars  of  cattle,  and  I have  super- 
vised the  selling  of  those  cattle,  and  I would  come  in  contact  with 
Denver,  Wichita,  Oklahoma  City,  Fort  Worth,  and  considerably  at 
Chicago,  and  I think  I know  the  live-stock  men’s  grievances  west 
of  the  Mississippi  River  and  east  of  Arizona.  Arizona  and  east. 
I have  heard  very  few  complaints  about  the  commission  man  in 
that  number  of  years.  The  commission  man  has  been  the  man 
that  I have  had  to  fight.  He  has  always  championed  the  cause  of 
the  shipper.  So  that  if  there  is  anything  I have  gained  through 
my  study  of  this  proposition  with  reference  to  competition  as  I 
have  observed  it  on  the  markets,  or  the  attitude  and  actions  of  the 
commission  men,  I should  be  very  glad  to  relate  them. 

Mr.  Clague.  Did  you  ever  have  any  experience  in  the  St.  Paul 
markets  ? 

Mr.  Boyd.  No,  sir. 

Mr.  Clague.  Or  the  South  St.  Paul? 

Mr.  Boyd.  No,  sir;  I have  not. 

Mr.  Clague.  Now  you  say  you  have  come  in  contact  with  the 
shippers.  Don’t  you  know  as  a matter  of  fact  that  the  shippers 
had  a great  many  grievances  in  those  yards  up  to  at  least  a couple 
of  years  ago  ? 

Mr.  Boyd.  It  was  my  duty  to  look  over  the  grievances  of  the 
live-stock  shippers,  and  I do  know  that  they  have  had  troubles  in 
the  stockyards;  yes,  sir.  They  have  them  quite  frequently.  If 
an  animal  was  lost,  either  the  carrier  has  lost  it,  the  commission 
men,  or  the  stockyards,  and  usually  we,  as  carriers,  had  to  find 
out  who  did  lose  it. 

Mr.  Clague.  Well,  I am  not  speaking  especially  of  that.  I am 
speaking  of  the  situation  in  South  St.  Paul,  from  your  actual  expe- 
rience in  shipping  there. 

Mr.  Boyd.  Mr.  Rogers  is  here  from  that  market,  and  I am  sure 
he  can  tell  you  all  about  it.  I would  not  want  to  venture  an  esti- 
mation about  something  I have  not  observed;  I would  not  want  to 
make  a statement  on  something  that  I have  not  seen. 

Mr.  Clague.  The  point  I am  getting  at  is  this:  Until  the  State 
put  in  State  regulations  there,  there  were  many,  many  grievances 
that  we  never  could  get  any  relief  from,  and  until  the  State  put  in 
regulations  there,  which  was  two  years  ago,  we  did  not  get  relief 
through  the  stock  exchange. 

Mr.  Boyd.  I heard  Mr.  Rogers  deny  that  statement  to-day.  He 
will  deny  it  to  you  again. 

Mr.  Clague.  Well,  we  will  be  glad  to  hear  from  him. 

Mr.  Gernerd.  I would  like  to  put  a few  questions  to  some  one 
in  the  packing  business.  Is  there  any  one  right  here  now  that  I 
can  put  a question  to  ? 

The  Chairman.  There  will  be  pretty  soon. 

Mr.  Tincher.  I understand  Mr.  Wilson  is  going  to  make  a state- 
ment. He  is  supposed  to  know  a considerable  amount  about  this 
business. 

Mr.  Gernerd.  There  are  a few  questions  that  I would  like  to  put 
to  him  when  he  comes  on. 

The  Chairman.  Are  there  any  other  questions  ? If  not,  we  will 
hear  the  next  witness. 

Mr.  Lightfoot.  Mr.  Hormel,  of  Austin,  Minn. 


310 


MEAT  PACKER. 


STATEMENT  OF  JAY  C.  HORMEL,  VICE  PRESIDENT  OF 
GEORGE  A.  HORMEL  & CO.,  AUSTIN,  MINN. 

Mr.  Hormel.  I had  a very  carefully  prepared  statement  here  that 
I was  going  to  read,  but  after  Mr.  Tinclier’s  inference  this  morning 
that  these  statements  were  not  always  prepared  by  the  people  who 
read  them,  I think  I will  pass  up  that  statement  and  answer  ques- 
tions instead. 

For  the  information  of  the  members  of  the  committee,  that  I have 
not  appeared  before  previously,  I will  state  that  I am  vice  president 
of  George  A.  Hormel  & Co.,  of  Austin,  Minn.  We  do  a business  of 
about  $30,000,000  a year.  Last  year  we  killed  more  than  530,000 
hogs,  20,000  cattle,  and  10,000  calves.  We  do  an  interstate  business 
reaching  pretty  nearly  every  State  in  the  Union,  and  a foreign  business 
through  our  export  corporation,  which  the  independent  packers,  a 
number  of  them,  formed  under  the  Webb  Act. 

Now,  if  any  of  the  members  of  the  committee  wish  to  ask  me  any 
questions,  I will  be  glad  to  answer  them. 

The  Chairman.  You  might  state  something  about  the  location  of 
the  plant,  something  of  the  competition,  and  also  about  the  private- 
car  proposition.  Your  plant  is  located  in  Minnesota? 

Mr.  Hormel.  Yes,  sir,  Mr.  Chairman;  our  plant  is  located  in 
Austin,  Minn. 

The  Chairman.  That  is  how  far  from  St.  Paul  ? 

Mr.  Hormel.  A hundred  miles  south  from  St.  Paul,  and  very  hear 
the  Iowa  State  line. 

The  Chairman.  You  come  in  competition  with  the  Big  Five? 

Mr.  Hormel.  We  do;  yes,  sir. 

The  Chairman.  Where  is  the  nearest  plant  ? 

Mr.  Hormel.  The  nearest  plant  is  at  Albert  Lea,  which  is  22  miles 
west  of  us. 

The  Chairman.  'Where  is  the  next  plant,  independent  plant;  the 
one  nearest  you  ? 

Mr.  Hormel.  Jacob  B.  Decker  & Sons,  at  Mason  City,  Iowa. 

The  Chairman.  How  far  is  that  from  you  ? 

Mr.  Hormel.  Fifty- two  miles,  I believe.  No;  it  is  48  miles  by 
rail  to  Mason  City,  Iowa. 

The  Chairman.  Now,  what  has  been  your  experience  in  competi- 
tion? Have  the  so-called  Big  Five  packers  tried  to  put  you  out  of 
business?  It  has  been  quite  frequently  alleged  here  that  you  suffer 
by  reason  of  their  plants  encroaching  upon  your  territory. 

Mr.  Hormel.  As  regards  live  stock,  or  as  regards  selling  the 
product,  Mr.  Chairman  ? 

The  Chairman.  Live  stock.  I have  heard  it  stated  a number  of 
times  that  Wilson,  being  west  of  you  at  Albert  Lea  22  miles,  has  cut 
off  your  supply  and  that  you  were  forced  to  go  to  St.  Paul  for  your 
supply.  It  has  been  stated  that  when  you  have  gone  to  St.  Paul, 
and  when  found  that  you  were  there,  or  reported  that  “ Hormel  is  in 
town,”  the  price  has  gone  up.  Have  you  heard  that  statement? 

Mr.  Hormel,  Yes. 

The  Chairman.  Well,  Mr.  Hormel,  the  committee  would  be  inter- 
ested in  hearing  what  you  have  to  say  about  that. 

Mr.  Hormel.  As  regards  Wilson  & Co.,  I will  say  that  Wilson 
& Co.  have  cut  us  on  from  some  of  our  supply  of  hogs.  They 


MEAT  PACKER. 


311 


being  25  miles  distant  from  us,  get  hogs  there  that  I suppose  would 
come  to  us  if  they  were  not  there.  However,  I hope  that  Mr.  Wilson 
won’t  scold  his  stock  buyers  from  this  evidence,  but  we  do  draw 
hogs  from  Albert  Lea  and  from  the  territory  beyond  them.  They 
have  not  cut  off  our  supply  in  any  way  that  we  can  put  our  finger  on 
or  say  what  it  amounts  to.  There  is  no  question  but  that  the  fact 
is  that  their  very  existence  there  means  that  they  get  some  hogs  that 
would  otherwise  come  to  us.  However,  that  same  statement  is  true 
of  packers  located  at  Sioux  Falls,  probably;  particularly  at  Sioux 
Falls,  and  also  true  at  Sioux  City. 

The  Chairman.  But  do  they  get  them  by  employing  unfair  methods 
or  unfair  competition  ? 

Mr.  Hormel.  No,  sir. 

The  Chairman.  That  is  the  question. 

Mr.  Hormel.  No,  sir. 

The  Chairman.  Do  they  get  any  hogs  at  Albert  Lea  that  used 
to  come  to  you  that  go  through  Austin  to  Albert  Lea  ? 

Mr.  Hormel.  Why,  I have  heard  of  several  cars  occasionally.  I 
think  they  are  not  successful  usually  in  bringing  hogs  through  Austin. 
We  have  a reputation  of  30  years’  standing  with  these  farmers  and 
shippers  there,  and  I don’t  believe  Wilson  & Co.  have  had  much 
success  in  breaking  through  Austin  with  their  hogs. 

The  Chairman.  Do  they  run  up  the  prices  in  your  territory? 

Mr.  Hormel.  I wouldn’t  say  so  as  a general  thing.  It  is  perhaps 
true-  that  our  hogs  cost  us  a little  more  due  to  their  being  there,  be- 
cause at  times  perhaps  we  would  both  be  anxious  to  kill,  and  be 
bidding  against  one  another  a little  more  actively  than  normally  and 
thereby  run  it  up  a few  cents.  But  I don’t  believe  that  would  be 
true  to  any  great  axtent. 

Mr.  Kincheloe.  Where  do  you  get  most  of  your  hogs? 

Mr.  Hormel.  We  get  most  of  our  hogs  locally;  that  is,  perhaps, 
within  a 50-mile  radius. 

Mr.  Kincheloe.  What  stockyards  do  you  buy  most  of  the  animals 
from,  Mr.  Hormel  ? 

Mr.  Hormel.  I haven’t  figured  it  up.  We  pretty  well  distribute 
our  purchases  between  St.  Paul  and  Sioux  City. 

Mr.  Kincheloe.  Do  you  find  that  there  is  competition  between  the 
packers  in  the  market  at  South  St.  Paul  ? 

Mr.  Hormel.  I don’t  know,  sir.  I was  never  on  the  South  St. 
Paul  market,  in  the  South  St.  Paul  yard.  I should  imagine  there  is. 

Mr.  Kincheloe.  Your  firm  buys  there,  doesn’t  it? 

Mr.  Hormel.  Yes. 

Mr.  Kincheloe.  Mr.  Wells  stated  that  it  was  the  common  thing 
that  when  your  firm  came  in  to  buy  it  was  reported  around  that 
“ Hormel  is  in  town,”  and  the  price  would  be  increased. 

Mr.  Hormel.  Well,  I am  very  much  disappointed  in  hearing  that, 
because  I didn’t  know  that  we  had  been  beat  so  bad  all  these  years. 
Here  is  the  situation.  A week  ago  last  Monday  morning  we  had 
7,500  hogs  in  Austin.  I forget  the  exact  number  on  the  St.  Paul 
market  that  morning,  but  not  a great  many  more  than  that.  We 
were  killing  at  that  time  at  the  rate  of  2,000  every  second  day;  in 
other  words,  it  was  going  to  keep  us  busy  all  week  killing  the  hogs  we 
had  on  hand.  Now  what  brought  those  hogs  in  we  don’t  know. 
They  just  came.  On  another  day  we  may  find  ourselves  without 


312 


MEAT  PACKER. 


hogs,  and  we  need  to  go  and  get  hogs  to  keep  our  plant  in  operation. 
When  that  day  conies  our  live-stock  department  telephones  at  7 
o’clock  or  7.15  in  the  morning  to  Omaha,  Sioux  City,  and  St.  Paul, 
and  they  ask  our  representatives  there,  commission  men  at  each  of 
those  points,  what  their  prices  are  for  hogs  on  that  day. 

Well,  now,  it  was  stated  that  we  usually  buy  200-pound  hogs  in 
St.  Paul.  That  is  usually  true,  at  St.  Paul,  for  the  reason  that  they 
do  sort  their  hogs,  and  there  is  no  reason  at  all  why  we  should  take 
a heterogeneous  lot  of  hogs  which  may  or  may  not  go  into  products 
that  we  want  to  deliver  to  our  trade,  when  we  can  get  these  200 
pounders.  So  we  ask  South  St.  Paul  what  he  wants  for  his  200 
pounders.  In  the  meantime  we  know  that  at  Sioux  City  the  hogs 
cost  a little  better  than  St.  Paul,  and  we  know  that  by  buying  from 
Sioux  City  we  are  on  the  same  basis  as  by  buying  out  of  St.  Paul. 
And  then  we  ask  Omaha  what  they  want  for  their  hogs.  Then  the 
market  that  is  the  cheapest  gets  the  order  at  the  price  that  was 
named  to  us,  before  we  made  any  bargain  at  all.  Now,  then  if  he 
can  not  fill  that  order  at  our  price  he  must  not  fill  it.  For  example, 
I have  seen  it  happen  many  times  when  we  have  ordered  2,000  hogs 
out  of  St.  Paul  that  we  got  only  500,  because  we  found  that  he  couldn’t 
get  them  for  the  price  that  we  instructed  him  to  buy  at. 

at_„_  i ^ i x1-~re  at  a certain  price,  and  get 


morning,  why  if  the  market 


does  go  up  25  or  40  cents,  so  that  Mr.  Wells  can  tell  by  looking  at 
his  price  sheet  that  we  have  been  in  there,  I am  afraid  that  it  is 
Swift,  and  Armour  that  pay  that  price,  and  not  us. 

Mr.  Tincher.  Are  you  worried  about  that,  do  you  say? 

Mr.  Hormel.  Sir? 

Mr.  Tincher.  Well,  you  are  not  really  worried  about  that? 

Mr.  Hormel.  Well,  I know  we  don’t  pay  it,  so  I am  not  worrying. 
I know  that  we  buy  at  a price  that  is  set  before  we  ever  make  our 
bargain. 

Mr.  Tincher.  He  said  the  mere  fact  that  you  came  on  there  dis- 
turbed them  to  such  an  extent  that  it  raised  the  market  25  to  40 
cents. 

Mr.  Hormel.  Well,  I happened  to  be  here  when  Mr.  Wells  was  on 
the  stand,  so  I wired  to  Austin  to  find  out  what  the  comparative 
receipts  were  at  Austin  and  St.  Paul  during  the  months  of  March 
and  April,  and  they  gave  me  these  figures : 

During  March:  Austin,  2,005  hogs  a day;  at  St.  Paul,  8,334  hogs 
a day. 

During  April:  At  Austin,  1,458  hogs  a day;  at  St.  Paul,  6,022  hogs 
a day. 

Now,  what  I make  from  these  figures  is  this.  If,  for  any  reason, 
we  find  that  we  have  to  go  to  St.  Paul  for  a single  day’s  killing, 
which  during  March  averaged  2,005  hogs  a day,  we  are  taking  from 
St.  Paul  very  nearly  25  per  cent  of  their  total  visible  supply.  Now, 
suppose  that  there  are  8,000  hogs  in  the  yard  that  morning,  and  sup- 
pose that  Swift  and  Armour,  each  of  them,  have  felt  that  their  hogs 
killed  that  day  should  be,  say,  3,500  hogs,  or  a total  of  7,000  between 
them,  leaving  1,334  to  be  distributed  out  among  such  outside  buyers, 
shippers,  speculators,  and  feeders  as  might  be  buying  those  hogs. 


MEAT  PACKER. 


313 


would  get  awfully  busy,  each  one  of  them,  the  minute  they  realized 
that  a big  lot  of  the  hogs  has  been  taken  out;  I imagine  that  each 
one  of  them  gets  awfully  busy  trying  to  get  the  3,500  that  he  wanted 
in  the  first  place,  each  one  realizing  that  if  he  doesn’t  get  busy  and 
buy  them  up  quick  the  other  will  get  the  3,500,  and  he  will  only 
have  2,500. 

Mr.  Kincheloe.  Do  you  mean  by  that  that  the  market  price  will 
thereby  increase  ? 

Mr.  Hormel.  That  is  what  we  always  believed,  yes,  sir.  Now,  if 
that  theory  of  ours  is  correct,  if  that  is  what  happens  up  there,  that 
explains  your  25  to  40  cent  raise  in  price. 

But  here  is  what  got  me  about  Mr.  Wells’s  statement.  Our  live- 
stock department  is  pretty  well  organized.  My  uncle  is  in  charge 
of  it,  and  he  is  a pretty  smart  man,  and  he  makes  a study  of  the  live- 
stock market,  and  he  can  not  tell  to-day  at  the  close  of  the  market 
what  the  market  is  going  to  be  to-morrow,  and  he  can  not  tell  this 
morning  at  the  opening  of  the  market  what  it  is  going  to  do  before 
it  closes,  and  how  in  the  world  Mr.  Wells  has  got  it  figured  out  to 
tell  just  where  that  market  is  going  so  that  he  can  tell  hv  looking  at 
the  figures  afterwards  that  it  is  25  or  40  cents  higher  than  it  would 
have  been,  I can’t  tell. 

Mr.  Kincheloe.  It  is  easy  to  figure  that  out  if  the  market  in- 
creased that  much. 

Mr.  Hormel.  It  is  easy  to  see  if  the  market  increases  that  much, 
but  how  he  knows  that  it  increased  25  to  40  cents  more  than  it 
would  have  gone,  I don’t  know,  I can’t  figure. 

The  Chairman.  It  has  been  stated  that  it  is  common  talk  in  the 
country  that  when  a man  ships  his  hogs  there  he  says,  <;We  want  to 
be  there  the  day  that  Hormel  buys.” 

Mr.  Hormel.  That  is  very  natural.  I don’t  deny  that  we  must 
raise  the  market  when  we  come  in. 

The  Chairman.  That  is  the  point  exactly. 

Mr.  Hormel.  It  is  the  old  law  of  supply  and  demand.  We  in- 
crease the  demand,  but  we  don’t  increase  the  supply. 

Mr.  Tincher.  As  I understand,  you  are  favorable  to  reasonable, 
constructive  legislation  upon  this  whole  subject? 

Mr.  Hormel.  Yes;  I am,  but  on  this  basis,  Mr.  Tincher.  I don’t 
believe  that  you  can  have  reasonable  and  favorable  legislation  on 
the  subject  unless  you  differentiate  between  the  packer  and  the  man 
who  is  in  some  other  business.  I don’t  believe  that  it  is  fair  when 
these  laws  are  what  we  have  been  calling  here  class  legislation.  I 
think  there  are  other  ways  of  approach  that  will  be  equally  effective 
and  less  potentially  harmful. 

Mr.  Tincher.  It  won’t  be  class  legislation,  it  will  be  general  legis- 
lation for  everyone.  You  won’t  pick  out  any  packer  and  legislate 
against  him,  but  you  will  legislate  on  the  whole  subject. 

Mr.  Hormel.  Now  there  have  been  four  main  reasons  brought  out 
here  as  to  why  there  should  be  some  such  legislation  as  is  being  con- 
sidered, and  I would  like  to  say  something  on  those  four  reasons. 

In  considering  the  lack  of  confidence — that  was  one  of  the  things 
that  was  argued  by — I believe  it  was  you,  Mr.  Tincher? 

Mr.  Tincher.  No. 

Mr.  Hormel.  In  considering  the  lack  of  confidence  to-day  between 
the  producer  and  the  packer  and  between  the  consuming  public  and 
the  packer,  there  is  no  question  but  that  there  exists  m the  mind 


314 


MEAT  PACKER. 


of  the  public  a certain  suspicion  toward  the  packers  in  general  and 
toward  the  practices  they  are  following.  The  ill  resulting  from  this 
suspicion  is  becoming  more  and  more  marked. 

Our  firm  has  never  been  accused,  either  directly  or  indirectly,  to 
our  knowledge,  of  having  engaged  in  any  unfair  or  wrongful  practices. 
However,  the  newspapers  have  been  full  of  the  tendency  on  the  part  * 
of  our  congressional  bodies  to  legislate  against  the  packers,  and  have, 
therefore,  set  up  in  the  minds  of  the  public  an  idea  that  after  all  the 
packer  should  be  regulated  and  has  not  yet  been  given  a clean  bill 
of  health. 

The  result  of  this  attitude  on  the  part  of  the  public  reaches  far  into 
our  business.  The  competition  in  selling  meats  is  actually  so  close 
that  the  difference  in  price  is,  as  a general  proposition,  not  sufficient 
to  warrant  any  dealer  trading  with  any  particular  packer.  He  is 
guided  only  by  personal  preference  or  by  the  quality  of  service  which 
the  packer  is  able  to  render.  If  this  body  can  contrive  a means 
whereby  the  small  packer  will  be  given  a clean  bill  of  health,  and 
whereby  the  public  will  be  given  the  idea  that  the  small  packer  at 
least  is  honest  and  not  rightfully  a subject  for  suspicion,  you  will  have 
taken  bigger  steps  to  build  up  the  business  of  the  small  packer  than 
anything  else  I can  conceive. 

And  I suppose  the  big  packers  will  tell  you  that  a definite  settle- 
ment of  this  question  will  be  more  or  less  of  a blessing,  too.  The 
suspicion  of  the  thing  is  what  is  hurting  us  now. 

Now,  it  has  been  argued  in  some  quarters  that  legislation  should  be 
passed  that  will  guarantee  to  the  public  that  the  packer  will  do  right 
because  of  the  supervision  over  him,  but  in  my  estimation  such 
legislation  will  tend  rather  to  make  the  public  feel  that  if  the  packer 
requires  such  close  supervision,  it  is  because  there  is  something  very 
questionable  about  his  business  methods.  In  this  way,  broad  legis- 
lation covering  all  the  packers  would  be  of  very  distinct  harm  to  the 
packers  who  so  far,  in  spite  of  the  insinuations  which  are  freely  circu- 
lated in  public  opinion,  have  been  able  to  maintain  something 
approaching  the  confidence  of  their  customers  and  of  the  live-stock 
man  and  shippers  who  furnish  them  with  their  raw  materials. 

Now,  that  is  on  the  first  point  that  has  been  brought  out,  the  lack  of 
confidence. 

The  Chairman.  One  moment,  Mr.  Hormel.  There  is  a call  for  a 
vote  in  the  House.  We  will  have  to  suspend. 

Mr.  Kincheloe.  I think  these  gentlemen  ought  to  be  heard,  Mr. 
Chairman,  and  I suggest  that  we  either  come  back  and  continue  the 
hearing  or  adjourn  until  this  evening. 

The  Chairman.  Very  well,  we  will  adjourn  until  7 o’clock,  and  we 
will  give  you  gentlemen  an  opportunity  then  of  being  heard. 

Without  objection  the  committee  will  stand  recessed  until  7 
o’clock. 

(Thereupon,  at  4.45  o’clock  p.  m.,  May  5,  1921,  the  committee 
adjourned  until  7 o’clock  p.  m.  of  the  same  day.) 

NIGHT  SESSION. 

The  committee  resumed  at  7 o’clock  p.  m.,  pursuant  to  recess, 
Hon.  Gilbert  N.  Haugen  (chairman),  presiding. 

The  Chairman.  The  committee  will  come  to  order  and  Mr.  Hormel 
will  resume  his  statement. 


MEAT  PACKER. 


315 


STATEMENT  OF  MR.  JAY  C.  HORMEL,  VICE  PRESIDENT  HOR- 
MEL  PACKING  CO.,  AUSTIN,  MINN.— Resumed. 

Mr.  Hormel.  I do  not  know  how  you  gentlemen  wish  me  to  pro- 
ceed. Shall  I make  ny  statement,  continue  my  statement,  or  answer 
questions  ? 

The  Chairman.  You  may  proceed  in  your  own  way,  in  whatever 
manner  you  like. 

Mr.  Hormel.  Well,  I do  not  know  just  how  much  of  my  statement 
as  I had  intended  to  make  it  I have  really  made,  as  there  have  been 
so  many  interruptions.  However,  in  order  to  get  it  in  more  concise 
form  I will  repeat  that  I am  vice  president  of  George  A.  Hormel  & 
Co.,  a concern  which  was  established  by  my  father  in  1891,  incor- 
porated 10  years  later,  and  from  the  smallest  beginning  has  steadily 
developed  until  it  is  to-day  the  largest  institution  in  our  part  of  the 
State. 

Last  year  we  transacted  a total  gross  business  of  more  than  $30,- 
000,000,  reaching  almost  every  part  of  the  United  States,  and, 
through  our  export  connections,  several  foreign  countries.  We  killed 
more  than  530,000  hogs,  20,000  cattle,  and  10,000  calves. 

Although  this  volume  of  business  is  sufficient  to  make  as  in  reality 
the  leading  industry  of  one  of  the  notable  agricultural  districts  of 
America,  we  are  distinctly  what  may  be  classed  as  a “ small  packer.7’ 
It  is  our  desire  at  the  outset  that  the  committee  may  clearly  differ- 
entiate between  the  large  and  the  small  packer.  We  have  our  own 
business,  run  with  our  own  brains,  and  financed  by  our  own  money. 
We  are  known  as  one  of  the  small  packers,  and  may  rightly  be  called 
independent  packers  because  our  ownership  is  in  nowise  linked  with 
other  packers  nor  with  any  outside  financial  interest. 

Ninety-seven  per  cent  of  our  stock  is  owned  by  residents  of  Mower 
County,  my  father  holding  the  majority  of  the  stock,  the  officers  of 
the  concern  being  the  only  other  large  holders  of  common  stock  and 
the  residents  of  Mower  County  holding  the  bulk  of  preferred  stock 
in  comparatively  small  blocks. 

If  wrongs  have  been  committed  by  packers,  we  are  not  here  in 
defense  of  those  wrongs.  If  ill  practice  has  been  followed,  we  do 
not  condone  it.  We  believe  that  the  proposed  legislation  would  be 
definitely  injurious  to  us  and  to  your  farmer  constituents  who  are 
dependent  upon  the  market  we  create  in  order  to  profitably  sell 
their  live  stock. 

We,  George  A.  Hormel  & Co.,  who  have  conducted  our  business 
since  its  inception,  always  with  a conscience,  are  asking  you  not  to 
make  any  move  which  will  injure  us  and  are  asking  you  not  to  class 
us  with  such  of  the  packers  as  may  have  committed  wrong  practices, 
or  other  acts  which  would  make  legislation  necessary  or  which  would 
justify  the  serious  contemplation  by  this  body  of  legislation  to  regulate 
all  packers. 

On  analyzing  the  viewpoints  of  the  proponents  of  these  bills,  we 
find  that  there  are,  in  the  main,  four  basic  arguments  used: 

First.  There  exists  a lack  of  confidence  and  coordination  between 
the  live-stock  man  and  the  packer  which  should  be  overcome,  and 
there  should  be  a feeling  on  the  part  of  the  live-stock  man  that  he  has 
someone  to  whom  he  may  turn  to  gain  redress  for  any  wrongs  he  may 
suffer. 


316 


MEAT  PACKER. 

Second.  There  is  considered  to  be  a potential  monopoly  which 
should  be  avoided. 

Third.  There  seems  to  be  a universal  feeling  that  the  stockyards 
should  be  regulated,  and  that  present  stockyard  practices  are  not 
altogether  fair  to  the  producer. 

Fourth.  Some  proponents  of  the  bill  feel  that  in  order  to  maintain 
the  autonomy  of  the  small  packer,  there  must  be  some  sort  of  a court 
of  appeals  to  which  the  small  packer  can  go  and  informally  present 
any  grievances  which  he  may  have. 

In  considering  the  lack  of  confidence  to-day  between  the  producer 
and  the  packer,  and  between  the  consuming  public  and  the  packer, 
there  is  no  question  but  that  there  exists  in  the  minds  of  the  public 
a certain  suspicion  toward  packers  in  general  and  toward  the  prac- 
tices they  are  following.  The  ill  resulting  from  this  suspicion  is 
becoming  more  and  more  marked. 

Our  firm  has  never  been  accused,  either  directly  or  indirectly,  to 
our  knowledge,  of  having  engaged  in  any  unfair  or  wrongful  prac- 
tices. However,  the  newspapers  have  been  full  of  the  tendency  on 
the  part  of  our  congressional  bodies  to  legislate  against  the  packers, 
and  have,  therefore,  set  up  in  the  minds  of  the  public  an  idea  that 
after  all  the  packer  should  be  regulated  and  has  not  yet  been  given 
a clean  bill  of  health. 

The  result  of  this  attitude  on  the  part  of  the  public  reaches  far  into 
our  business.  The  competition  in  selling  meats  is  actually  so  close 
that  the  difference  in  price  is,  as  a general  proposition,  not  sufficient 
to  warrant  any  dealer  trading  with  any  particular  packer.  He  is 
guided  only  by  personal  preference  or  by  the  quality  of  service  which 
the  packer  is  able  to  render.  If  this  body  can  contrive  a means 
whereby  the  small  packer  will  be  given  a clean  bill  of  health,  and 
whereby  the  public  will  be  given  the  idea  that  the  small  packer  at 
least  is  honest  and  not  rightfully  a subject  of  suspicion,  you  will  have 
taken  bigger  steps  to  build  up  the  business  of  the  small  packer  than 
anything  else  I can  conceive. 

The  big  packers  will  also  undoubtedly  tell  you  that  a definite 
settlement  of  this  question  of  virtue  would  be  a blessing. 

It  has  been  argued  in  some  quarters  that  legislation  should  be 
passed  that  will  guarantee  to  the  public  that  the  packer  will  do  right 
because  of  the  supervision  over  him,  but  in  my  estimation  such  legis- 
lation will  tend  rather  to  make  the  public  feel  that  if  the  packer  re- 
quires such  close  supervision,  it  is  because  there  is  something  very 
questionable  about  his  business  methods.  In  this  way,  broad  legis- 
lation covering  all  the  packers  would  be  of  very  distinct  harm  to  the 
packers  who  so  far,  in  spite  of  the  insinuations  which  are  freely  cir- 
culating in  public  opinion,  have  been  able  to  maintain  something 
approaching  the  confidence  of  their  customers  and  of  the  live-stock 
man  and  shippers,  who  furnish  them  with  their  raw  materials. 

The  second  point  which  has  seemed  to  particularly  impress  itself 
as  worthy  of  consideration  is  the  claim  that  there  exists  in  the  pack- 
ing industry  a potential  monopoly,  and  the  idea  seems  to  prevail  that 
any  of  these  bills,  if  passed,  would  prevent  consummation  of  such  a 
monopoly. 

In  this  regard  I declare  myself  as  an  advocate  of  direct  action. 
If  there  is  a danger  of  monopoly,  let  us  directly  attack  the  sources 
from  which  such  monopoly  is  liable  to  grow.  Last  year  George  A. 


MEAT  PACKER. 


317 


Hormel  & Co.  slaughtered  six- tenths  of  1 per  cent  of  the  live  stock 
slaughtered  in  the  United  States.  It  would  require  many  years  of 
most  favorable  and  unusual  growth  for  any  of  the  small  packers  to 
even  approach  a condition  whereby  even  a combination  of  them 
might  be  considered  to  have  monopolistic  tendencies.  Indeed,  for 
Congress  to  enact  legislation  to  prevent  them  from  becoming  monop- 
olistic would  be  almost  an  absurdity. 

The  third  big  question  in  regard  to  packer  legislation  is  how  to  best 
handle  the  stockyards.  In  fact,  the  supporters  of  this  bill  are  almost 
entirely  men  interested  in  the  stockyards,  and  so  far  as  I know  a very 
negligible  proportion  of  the  support  has  emanated  from  sources 
related  to  the  distributing  end  of  the  business.  You  have  heard  Mr. 
Wells,  on  Monday,  tell  you  that  normally  there  was  no  competition 
between  the  big  packers  in  the  South  St.  Paul  yards  in  the  purchase 
of  live  stock.  But  the  fact  is  that  there  is  competition  every  day  in 
the  selling  markets  between  the  big  and  the  small  packer,  for  I do  not 
believe  that  there  is  a single  market  in  the  United  States,  nor  very 
many  abroad,  where  the  selling  agencies  of  the  big  packers  and  the 
small  packers  are  not  present  in  such  a way  that  big  and  small,  both 
among  themselves  and  with  each  other,  must  be  in  most  active  com- 
petition in  order  to  get  enough  business  to  keep  them  alive. 

Therefore,  no  matter  what  is  deduced  as  to  the  truth  of  the  state- 
ments you  have  heard  made  as  regards  competitive  conditions  in  the 
stockyards,  I maintain  that  such  lack  of  competition  is  in  no  case 
present  in  our  wholesale  selling  market.  The  very  intensity  of  the 
competition  in  the  wholesale  markets  is  of  itself  ample  guaranty  of 
fair  practice  in  them. 

Now,  then,  in  view  of  the  experience  in  the  State  of  Minnesota, 
which  is  claimed  to  be  so  successful  in  restoring  the  confidence  of  the 
shipper  in  the  markets  to  which  he  is  forced  to  go  with  his  stock,  and 
contemplating  the  open  competition  which  exists  in  the  wholesale 
meat  markets,  it  would  seem  a logical  conclusion  that  if  any  legislation 
whatever  is  necessary  it  would  be  legislation  to  govern  the  practices 
in  the  stockyards  rather  than  legislation  governing  the  packers  them- 
selves. 

The  fourth  argument  which  I have  heard  brought  out  is  that  for  the 
security  of  the  small  packer  there  should  be  some  court  of  appeal  to 
which  the  small  operator  could  informally  go  when  he  felt  that  he  was 
being  subjected  to  unfair  treatment. 

In  this  connection,  gentlemen,  I wish  to  point  out  to  you  that  the 
small  packer  is  a fighter.  He  is  resourceful.  He  feels  pretty  well 
able  to  take  care  of  himself  through  the  agencies  already  provided  by 
law. 

For  example,  I understand  that  paragraph  5,  chapter  311,  of  the 
Federal  trade  act  of  September  26,  1914,  contains  these  words: 

Unfair  methods  of  competition  in  commerce  are  hereby  declared  unlawful. 

To  my  mind  that  may  be  made  to  cover  anything  which  it  is  feasible 
to  include  in  any  bill  you  might  propose.  True,  it  is  not  specific,  but 
you  have  an  efficient  system  of  courts  to  which  you  may  turn  for 
specific  decisions.  It  would  seem  to  me  that  any  evidence  sufficient 
to  warrant  action  by  the  Secretary  of  Agriculture  under  Mr.  Haugen’s 
bill,  or  by  the  Federal  Trade  Commission  under  Mr.  Anderson’s  bill, 
or  by  the  Federal  Live  Stock  Commission  proposed  by  Mr.  Me- 


318 


MEAT  PACKER. 


Laughlin,  would  likewise  constitute  sufficient  evidence  for  prosecution 
in  court  under  the  provisions  of  the  Federal  trade  act.  I believe  that 
under  the  provisions  of  this  act  we  would  be  able  to  secure  an  in- 
junction stopping  and  prohibiting  any  acts,  by  any  packer,  unfair 
to  us. 

My  intimations  so  far  have  been  that  the  need  does  not  actually 
exist  for  legislation  in  the  form  in  which  the  present  bills  are  sug- 
gested. I not  only  wish  to  conclude  that  legislation  to  regulate  the 
packer  is  unnecessary,  but  that  it  would  finally  fail  to  accomplish 
the  things  expected  of  it  and  would,  indeed,  react  to  accentuate  the 
very  conditions  which  I believe  it  is  desired  to  avoid. 

I have  said  that  in  my  mind  there  would  be  attached  to  the  packing 
industry  in  general  the  stigma  of  suspicion  more  defined  and  more 
pronounced  than  it  has  been  in  the  past,  and  every  observer  of  the 
industry  must  realize  that  the  odium  of  suspicion  of  the  packing 
industry  has  been  anything  but  helpful  to  it.  So  far  this  suspicion 
has  been  more  largely  directed  at  the  larger  companies,  who,  regardless 
of  the  degree  in  which  they  have  merited  it,  are  by  virtue  of  their 
size  better  able  to  withstand  it. 

This,  however,  is  but  one  of  the  many  disadvantages  that  the 
passage  of  any  of  these  bills  would  inflict  upon  the  small  packer.  It 
must  be  remembered  that  the  very  size  of  these  larger  packing  com- 
panies constitutes  in  itself  a force  and  momentum  which  is  sufficient 
to  carry  them  over  the  rough  places  which  would  constitute  real 
obstacles  to  the  smaller  operators.  Their  very  greatness  is  a factor 
in  helping  them  to  accomplish  the  various  objects  incident  to  the 
prosecution  of  their  business.  The  powerful  organizations  which 
they  have  been  able  to  build  up  to  carefully  watch  over  the  endless 
ramifications  and  details  of  their  business  constitute  an  overhead 
which  the  smaller  operator  can  not  afford  to  maintain.  Our  advan- 
tages in  competing  with  them  must  come  from  other  sources.  We 
have  such  advantages,  which  I could  enumerate  to  you,  if  time  per- 
mitted. But  one  of  the  greatest  of  these  is  the  fact  that  the  big 
packer  and  the  small  packer  actually  are  in  a different  category,  the 
one  from  the  other.  If  you  fear  monopoly,  a good  thing  to  prevent 
it  is  not  to  pass  some  legislation  saying  all  packers  are  alike  and  should 
be  looked  upon  alike,  but  rather  pass  some  legislation  which  would 
accentuate  the  differentiation  between  the  big  and  the  small. 

Their  very  size  makes  it  dangerous  to  pass  a bill  affecting  the  big 
and  the  small  packers  alike.  A simple,  and  perhaps  negligible,  exam- 
ple will  serve  to  illustrate  this  point.  Under  the  Pure  Food  Act  we 
are  required  to  comply  with  certain  regulations  in  the  making  of  con- 
tainers of  food  products.  On  the  item  of  sliced  bacon,  for  instance, 
it  is  necessary  for  us  to  incur  the  expense  of  an  artist  to  prepare  the 
original  sketches  which  must  be  submitted  to  the  Department  of 
Agriculture  at  Washington.  We  must  purchase  plates.  The  total 
of  these  and  other  incidental  expenses  in  the  preparation  of  such  a 
carton  for  our  sliced  bacon  must  be  prorated  over  a comparatively 
small  volume  of  business.  In  the  case  of  a big  packer,  the  same 
expense  will  do  the  ground  work  for  the  preparation  of  cartons  to 
handle  many  times  our  volume. 

A series  of  expenditures  such  as  this,  prorated  by  the  small  packer 
against  a small  volume  and  by  the  big  packer  against  a big  volume 
of  business,  constitutes  a distinct  disadvantage  to  the  small  operator. 


MEAT  PACKEK. 


319 


It  is  bound  to  happen  with  the  most  carefully  conceived  legislation. 
There  will  arise  first  one  thing  and  then  another;  always  something 
new  and  unexpected,  perhaps  small  in  itself,  but  certainly,  gentlemen, 
the  aggregate  is  large  and  acts  as  a decided  discrimination  against  the 
one  doing  the  smaller  volume  of  business. 

The  packing  business  is  a decidedly  precarious  business.  There 
are  no  calipers  to  measure  a ham,  no  gauge  has  been  evolved  to 
measure  the  size  of  a pork  loin.  Accuracy  is  dependent  entirely 
upon  the  human  element  and  it  is  practically  impossible  to  get  a 
close  check  on  the  workmanship  except  as  a matter  of  judgment. 
In  the  curing  departments,  if  a ham  is  too  mild,  it  will  sour  in  the 
smokehouse;  if  it  is  too  salt,  it  is  not  a salable  article.  Exactness 
and  precision  must  be  maintained,  and  yet  absolute  standards  do  not 
exist.  Minor  wastes  so  small  that  they  may  be  likened  to  the  con- 
stant dropping  of  water  upon  stone  will  likewise  undermine  the 
strongest  institutions. 

All  this  the  packers  normally  have  to  face,  but  when  any  new 
condition  presents  itself,  be  it  legislative  or  economic,  the  little 
packer  suffers  worst.  Right  to-day  there  are  three  well-conducted 
packing  houses  in  the  State  of  Iowa  which  are  on  the  verge  of  having 
to  shut  their  doors  because  the  general  conditions  now  existing  have 
hit  the  little  fellow  hardest. 

To  be  able  to  tell  you  specifically  all  the  ills  that  might  result  from 
the  present  proposed  bills  would  require  a foresight  and  an  imagina- 
tion much  greater  than  mine.  T 1 1 


ever  limitations  or  regulations 
will  affect  the  little  fellow  moi 


low  more 


instances  will  affect  the  little  fellow  where  it  touches  the  big  one  not 

at  all. 

In  concusion,  let  me  say  this:  We  have  a business  comparatively 
small,  in  the  State  of  Minnesota — an  agricultural  State.  That 
business  is  virtually  owned  by  my  father.  His  business  has  grown 
from  a butcher  shop  to  what,  under  the  provisions  of  this  proposed 
legislation,  is  a packing  industry. 

There  is  no  direct  nor  indirect  connection  between  us  and  the 
so-called  big  packers.  There  is  no  fundamental  difference  what- 
soever between  my  business  and  that  of  any  other  jobber  or  manu- 
facturer of  any  product  made  in  the  United  States.  No  legislation 
is  contemplated  against  men  engaged  in  other  businesses  because 
statutes  have  already  been  passed  that  cover  their  business,  and  ours 
too,  if  that  business  be  in  violation  of  the  present  laws  against 
monopoly.  The  effect  of  the  proposed  legislation  is  to  condemn  us 
before  the  fact — to  condemn  us  in  advance  of  any  improper  or 
illegal  act.  We  resent  this,  because  it  is  unfair  and  unjust. 

At  the  time  I was  in  college  there  came  about  the  first  of  these 
packer  investigations.  By  the  very  tone  of  them,  my  father  foresaw 
the  hardship  which  must  necessarily  result  upon  the  packing  industry 
as  a whole.  He  did  everything  he  could  to  encourage  me  to  abandon 
my  idea  of  following  in  his  footsteps  and  to  turn  me  to  some  profession 
or  some  other  line  of  business. 

If  the  attitude  of  the  legislators  of  this  country  now  is  and  will 
continue  to  be  that  the  packer  is  bad,  and  must  be  specifically  con- 
trolled and  regulated  by  law,  that  the  business  is  not  honorable  and 
is  not  imbued  with  the  conscience  which  business  men  must  have  if 


320 


MEAT  PACKER. 


they  are  to  continue  to  be,  as  they  have  been  in  the  past,  the  back- 
bone of  our  Nation;  if  to  be  a packer  is  to  be  looked  upon  with  sus- 
picion, I might  well  believe  that  my  father  was  right  and  that  even 
now,  while  I am  young  enough  to  do  so,  I had  better  turn  to  some 
other  industry  if  I wish  a satisfactory  career. 

Those  things,  however,  I know  are  farthest  from  your  thoughts. 
You  simply  have  not  sufficiently  considered  the  effect  on  the  public 
of  legislative  disapproval  of  our  business  and  of  its  methods.  But 
you  can  not  blame  me,  as  one  directly  affected,  when  I say  that  I 
resent  the  very  fact  that  this  committee  is  seriously  contemplating 
specific  legislation  which  will  include  in  its  intendment  a concern 
like  ours,  which  has  a clean  record  in  court  and  out,  among  the 
farmers  who  supply  us  with  our  live  stock,  and  among  the  dealers 
who  buy  our  meats  from  us. 

If  there  actually  exist  in  the  packing  industry  individual  concerns 
whose  actions  should  be  censored,  or  if  there  are  companies  who  have 
committed  wrongs  against  our  economic  and  social  structure,  I can 
only  beg  you  to  find  some  means  to  ferret  out  those  individuals, 
punish  them  where  that  is  necessary,  regulate  them  where  that  is 
necessary,  but  leave  the  balance  of  the  industry  with  a clean  bill  of 
health,  with  legislative  approval,  instead  of  legislative  suspicion,  and 
give  us  a free  rein  to  go  ahead  and  build  up  our  part  in  the  democratic 
and  truly  American  economic  structure  on  which  this  Nation  is 
dependent. 

Mr.  Ten  Eyck.  After  recess  I believe  you  were  saying  something 
about  the  difficulty  of  passing  legislation.  What  was  that  ? 

Mr.  Hormel.  Just  as  we  broke  up  the  point  I was  trying  to  make 
was  this,  that  it  is  exceedingly  difficult  to  pass  any  legislation  here 
that  would  be  just  and  fair  to  everybody  concerned  by  reason  of  its 
effect  on  the  public  mind,  and  the  danger  of  your  passing  legislation 
which,  if  by  inference  if  nothing  else,  puts  the  packer  under  suspicion 
and  thereby  makes  the  public  feel  that  they  have  got  to  be  careful  in 
dealing  with  him. 

Mr.  McLaughlin  of  Nebraska.  Do  you  think  any  reasonably 
restrictive  legislation  that  the  Congress  could  pass  to  exercise  super- 
vision over  the  packing  industry  could  cause  the  public  mind  to  be 
any  more  restless  and  distrustful  than  is  the  case  now  and  has  been 
for  the  past  three  years  ? It  was  the  restless  condition  of  the  public 
mind,  or  the  suspicion  lurking  in  the  public  mind,  that  started  the 
whole  thing.  Congress  would  never  have  thought  of  it  but  for  the 
demand  on  the  part  of  the  people. 

Mr.  Hormel.  Perhaps  not,  but 

Mr.  McLaughlin  of  Nebraska  (continuing).  What  do  you  think 
would  be  the  effect  on  the  public  after  all  the  agitation  that  has  been 
had  and  after  all  the  testimony  they  have  sent  to  us,  and  after  having 
this  matter  open  for  years,  if  the  Congress  were  to  simply  now  lie 
down  and  say:  “We  will  not  do  anything.”  Suppose  we  were  to 
dismiss  the  whole  subject  ? 

Mr.  Hormel.  I think  the  Congress  would  be  making  a serious 
mistake  if  it  did  that. 

Mr.  McLaughlin  of  Nebraska.  So  do  I. 

Mr.  Hormel.  But  I want  to  qualify  that  answer  in  this  way: 
Although  the  Congress  should  do  something,  I do  not  believe  that 
you  should  do  something  that  relates  only  to  the  packer.  That  is  to 


MEAT  PACKET. 


321 


say,  any  crime  which  the  packer  may  commit  is  still  a crime  if  com- 
mitted by  anyone  in  some  other  industry.  Therefore  let  us  make  our 
law  read  so  that  the  crime  or  crimes  that  may  be  defined  are  not 
simply  a crime  or  crimes  when  committed  in  the  packing  industry 
but  are  also  a crime  or  crimes  when  committed  in  any  other  industry. 

Mr.  McLaughlin  of  Nebraska.  You  do  not  believe  it  would  be 
possible  for  the  Congress  to  write  a supervisory  law  in  a bill  of  this 
kind-  that  would  permit  of  the  exercise  of  supervision  over  all  the 
different  business  interests  of  the  country,  do  you  ? 

Mr.  Hormel.  Well,  now,  Mr.  McLaughlin,  I doubt  very  much 
if  it  is  possible  for  the  Congress  to  write  into  one  bill  provisions 
which  will  be  definitely  prohibitory  to  the  packing  industry.  To 
illustrate  that  let  us  consider  it.  Just  what  are  the  wrongs  we  want 
to  remedy? 

Mr.  McLaughlin  of  Nebraska.  How  was  that? 

Mr.  Hormel.  Just  what  are  the  wrongs  we  want  to  remedy  ? 

Mr.  McLaughlin  of  Nebraska.  Of  course,  you  would  not  expect 
me  to  enter  into  an  extended  discussion  of  that  now.  That  is  a 
matter  that  is  in  the  hearings  and  in  the  bill. 

Mr.  Hormel.  What  I meant  was  this:  Perhaps  we  may  consider 
some  one  specific  thing  that  the  packer  might  do,  and  then  consider 
whether  or  not  it  would  be  possible  to  write  into  a bill  here  any  more 
definitely  than  it  is  already  written  into  other  legislation,  a prohibi- 
tion against  it;  or  any  better  than  it  might  be  written  as  an  amend- 
ment to  existing  legislation. 

Mr.  Tincher.  I will  suggest  one  thing  which  is  the  practice  I 
understand  now  and  possibly  the  next  gentleman,  who  will  follow 
you,  will  go  into  more  completely  than  you  can;  and  it  ought  to  be 
stopped.  I do  not  think  it  could  be  stopped  by  a direct  provision 
of  law.  I do  not  think  it  could  be  stopped  except  by  supervision. 
A representative  of  a commission  house  at  St.  Paul  says  that  in  a 
certain  case  an  independent  packer  said  he  wanted  to  put  in  a bid 
on  some  stock  held  by  some  commission  man.  He  was  told  by  the 
commission  man  that  his  bid  could  not  be  considered  until  Swift  & 
Co.’s  buyer  had  a chance  to  purchase;  that  if  anybody  else  would  be 
allowed  to  buy  first  Swift  & Co.’s  man  would  not  buy  from  the  com- 
mission man. 

Mr.  Hormel.  Right  on  that  point  let  me  say  that  to  my  mind  the 
third  big  question  in  regard  to  packer  legislation  is  how  to  best 
handle  the  stockyards.  In  fact,  the  supporters  of  this  bill  are  almost 
entirely  men  interested  in  the  stockyards,  and  so  far  as  I know  a very 
negligible  proportion  of  the  support  has  emanated  from  sources 
related  to  the  distributing  end  of  the  business.  You  heard  Mr.  Wells 
on  Monday  tell  you  that  normally  there  was  no  competition  between 
the  big  packers  in  the  South  St.  Paul  yards  in  the  purchase  of  live- 
stock. But  the  fact  is  that  there  is  competition  every  day  in  the 
selling  markets  between  the  big  and  the  small  packers;  and  I do  not 
believe  that  there  is  a single  market  in  the  United  States,  nor  very 
many  abroad,  where  the  selling  agencies  of  the  big  packers  and  the 
small  packers  are  not  present  in  such  a way  that  big  and  small, 
both  among  themselves  and  with  each  other,  must  be  in  most  active 
competition  in  order  to  get  enough  business  to  keep  them  alive. 

46985—21 21 


322 


MEAT  PACKER. 


Therefore,  no  matter  what  is  deduced  as  to  the  truth  of  the  state- 
ments you  have  heard  made  as  regards  competitive  conditions  in  the 
stockyards,  I maintain  that  such  lack  of  competition  is  in  no  case 
present  in  our  wholesale  selling  market.  The  very  intensity  of  the 
competition  in  the  wholesale  markets  is  of  itself  ample  guaranty  of 
fair  practice  in  them.  Now,  then,  in  view  of  the  experience  in  the 
State  of  Minnesota,  which  is  claimed  to  be  so  successful  in  restoring 
the  confidence  of  the  shipper  in  the  markets  to  which  he  is  forced  to  go 
with  his  stock,  and  contemplating  the  open  competition  which  exists 
in  the  wholesale  meat  markets,  it  would  seem  a logical  conclusion  that 
if  any  legislation  whatever  is  necessary  it  would  be  legislation  to 
govern  the  practices  in  the  stockyards  rather  than  legislation  govern- 
ing the  packers  themselves. 

Mr.  Tincher.  Well,  wait  a minute  right  there.  I have  spoken 
about  a charge  made  by  a commission  company  against  Swift  & 
Co.,  which  is  certainly  not  good  business,  is  an  unfair  practice,  in 
a competitive  open  market,  whereby  Swift  & Co.,  big  as  they  are, 
in  South  St.  Paul  says  to  a commission  company:  If  you  let  a cer- 
tain independent  packer  bid  on  your  stuff  before  I get  a chance  I 
will  not  buy  any  more.  He  says  to  the  independent  packer:  I will 
not  let  you  bid  until  after  Swift  & Co.  bids  because  if  I do  they  will 
not  buy.  Is  that  a practice  that  ought  to  be  forbidden  ? 

Mr.  Hormel.  Absolutely. 

Mr.  Tincher.  Suppose  then  he  goes  ahead  and  says  further.: 
Now,  Swift  & Co.  have  bid,  but  I will  not  entertain  a bid  from  you 
for  less  than  25  cents  more  than  your  bid.  I will  not  entertain  a 
bid  for  20  cents  a hundred  pounds  more,  because  they  will  not  trade 
with  me  if  I sell  to  you  for  an  advance  of  20  cents  over  your  bid. 
They  will  let  me  sell  to  you  for  25  cents  more  than  their  bid,  but  I 
can  not  have  their  trade  if  I sell  to  you  for  less  than  25  cents  more 
than  their  bid.  Is  that  an  evil  practice  that  ought  to  be  corrected  ? 

Mr.  Hormel.  Yes,  sir;  if  that  exists  it  certainly  is.  And  I am 
willing  to  grant  that  the  stockyards  should  be  in  some  way  regulated. 

Mr.  Tincher.  Well,  hold  on.  Who  is  the  cause  of  that?  That 
poor  devil  of  a commission  man  who  is  selling  cattle  up  there  for 
so  much  a car  can  not  afford  to  alienate  Swift  & Co.  They  buy  34 
per  cent  of  their  total  cattle  every  year  that  are  shipped  there.  The 
poor  commission  man  can  not  afford  to  turn  them  down.  Besides, 
it  is  not  only  Swift  & Co.,  but  according  to  the  testimony  here  in  the 
Federal  Trade  Commission’s  report  it  is  true  of  all  the  big  packers. 
In  St.  Paul  it  is  Swift  & Co.  and  Armour,  but  at  some  other  place  it 
is  Swift  & Co.  and  some  or  all  of  the  others. 

Mr.  Hormel.  That  is  all  very  well,  but  neither  Swift  & Co.  nor 
Armour  & Co.  committed  that  wrong  practice,  if  it  was  committed, 
in  the  conduct  of  the  packing  business.  They  did  it,  if  at  all,  in  the 
purchase  of  live  stock  in  stockyards,  at  a place  where  they  must  be 
purchased  in  a market. 

Mr.  Tincher.  But  who  was  the  man  who  did  this  act  working  for  ? 

Mr.  Hormel.  I do  not  know. 

Mr.  Creigh.  If  I may  butt  in,  Mr.  Tincher,  in  order  to  attempt 
to  clear  that  up,  let  me  say  that  Mr.  Hormel  speaks  of  the  difference 
between  the  conduct  of  the  packing  industry  and  the  conduct  of  the 
stockyards;  and  there  he  is  referring  to  the  conduct  of  the  representa- 
tives in  the  stockyards. 


MEAT  PACKER. 


323 


Mr.  Tincher.  Well,  that  is  a practice  of  the  packers. 

Mr.  Hormel.  But  he  must  go  to  the  stockyards  to  do  it.  If  you 
can  so  regulate  the  stockyards  so  that  every  man  will  have  a fair 
opportunity  to  sell  and  every  man  a fair  opportunity  to  buy,  if  there 
is  an  evil  there,  I will  be  in  accord  with  such  legislation. 

Mr.  Tincher.  I think  we  have  got  to  control  the  whole  industry 
to  get  at  that.  And  I want  to  say  further  that  I do  not  think  any 
packer  who  wants  to  do  the  right  thing  ought  to  object  to  any  law 
that  will  prohibit  a packer  from  engaging  in  that  sort  of  practice. 

Mr.  Cretgh.  Well,  now,  I am  glad  you  are  getting  down  to  specific 
cases. 

Mr.  Tincher.  Yes,  and  I have  a lot  of  them. 

Mr.  Creigh.  Let  me  see  if  I can  state  it  in  a sentence.  The  alleged 
grievance  is  said  to  have  occurred  in  the  South  St.  Paul  stockyards. 
You  will  have  to  take  this  as  second  or  third  removed  hearsay,  but 
we  will  pass  that  point  by  for  a minute.  It  is  stated  in  that  report 
of  the  Federal  Trade  Commission  that  one  of  Swift  & Co.’s  buyers 
said  to  a commission  man  that  unless  Swift  was  able  to  put  in  the 
first  bid  on  the  live  stock  he  wanted  he  would  not  buy  any  more 
from  that  commission  man.  Is  that  it  ? 

Mr.  Tincher.  Yes;  that  is  it  and  even  more. 

Mr.  Creigh.  Well,  let  me  apply  that  to  the  position  taken  by  the 
packers.  No  one  of  the  bills  here  states  as  to  whether  or  not  that  is 
an  unfair  practice.  But  if  you  will  put  in  an  order  to  cease  and  desist 
from  that  what  would  you  have — what  would  the  order  be  ? 

Mr.  Tincher.  It  would  be  an  order  to  Swift  & Co.  to  cease  and  desist 
from  discriminating  among  commission  men,  and  using  such  influ- 
ences in  the  yards,  to  cease  and  desist  from  saying  they  would  not 
purchase  live  stock  from  him. 

And  while  on  this  point  I want  to  say  that  my  personal  opinion 
is  that  that  is  one  of  the  real  evils  of  the  trade.  I know  myself  in 
the  shipment  of  stock  that  I have  felt  there  was  no  effort  made  on 
the  part  of  my  commission  man  to  make  a sale,  and  I have  quarreled 
with  more  than  one  commission  man  because  I thought  he  would  not 
make  the  proper  effort  to  get  a proper  bid  from  the  packers’  repre- 
sentatives. And  I have  been  told  by  commission  men:  “I  can  not 
destroy  my  whole  business  here.  I understand  this  thing,  and  I am 
getting  all  that  is  being  bid  on  this  stock;  every  dollar  for  it.”  I 
want  to  say  that  if  the  packers  by  reason  of  the  enormous  volume  of 
their  trade  on  the  market  are  absolutely  able  to  dictate  to  the  com- 
mission men  as  to  how  they  will  sell  my  stuff,  it  is  an  evil  that  ought 
to  be  corrected. 

Mr.  Creigh.  Let  me  continue  there  for  a moment,  if  I may,  in 
reference  to  what  order  would  be  issued.  I do  not  want  you  to  get 
the  idea  I am  trying  to  justify  any  evil  practice.  As  I told  you  this 
afternoon,  I am  in  favor  of  machinery  right  on  the  spot  that  will  cor- 
rect any  such  thing  that  may  exist.  But  I am  simply  trying  to  call 
attention  to  the  machinery  provided  in  any  one  of  these  bills,  that  a 
commission  here  in  Washington,  after  a long  hearing,  after  the  filing 
of  a complaint  and  the  taking  of  testimony,  and  this  and  that  other 
delay,  will  take  action,  which  will  mean  months  before  any  such 
isolated  case  will  be  corrected.  Then  you  come  to  the  order  propo- 
sition, and  you  say  you  will  tell,  say,  Swift  & Co.,  to  stop  doing  this 


324 


MEAT  PACKER. 


or  that,  or  saying  this  or  that  to  the  commission  man.  That  is  not 
machinery  provided  right  on  the  spot  to  meet  each  individual  case, 
but  is  a general  matter  by  which  a complaint  must  be  filed  and  a 
hearing  had  and  much  delay  result. 

Mr.  Tincher.  Your  idea  would  be  than  that  the  rules  of  the 
exchange  ought  to  prohibit  any  such  practice  ? 

Mr.  Creigh.  That  is  fine.  Yes,  let  us  put  it  in  the  rules  of  the 
exchange  and  let  the  exchange  regulate  the  thing  and  have  the 
supervision  in  the  exchange.  That  is  the  direct  method  that  we 
suggest. 

Mr.  Hormel.  May  I ask  you  a question  that  is  probably  a little 
out  of  the  angle  we  are  working  on  now,  but 

The  Chairman  (interposing) . There  is  nothing  to  hinder  the 
Department  of  Agriculture  from  having  a man  at  the  stockyards  to 
adjust  all  these  things.  That  man  would  go  to  the  packers  and 
say  that  these  things  should  be  stopped. 

Mr.  Creigh.  What  the  packer  fears  in  all  these  bills  is  that  with  the 
elasticity  of  the  language  employed  we  will  have  somebody  in  Wash- 
ington who  is  regulating  all  the  business,  through  a thousand  and  one 
subordinates.  Let  us  put  it  back  in  the  stockyards. 

The  Chairman.  The  head  would  be  in  Washington,  but  Washing- 
ton could  not  directly  handle  all  those  things  ; the  department  would 
employ  some  one  capable  of  settling  these  matters. 

Mr.  Creigh.  Mr.  Chairman,  just  let  me  illustrate  that  point 
again : Here  is  the  meat  inspection  act,  and  none  of  us  are  complain- 
ing about  it,  and  the  bulk  of  the  time  it  is  working  perfectly  fine. 
But  to-day  in  some  packing  house  some  inspector  may  come  along 
and  say:  Here  is  a bunch  of  cattle  that  are  tubercular.  He  puts  a 
tag  on  $10,000  worth  of  cattle.  The  packer  may  want  to  take  an 
appeal  from  his  decision.  If  they  have  to  go  through  the  routine  of 
that  the  stuff  would  rot  on  the  rail  before  they  would  get  a decision. 

Mr.  Tincher.  How  do  they  do  that  now  ? 

Mr.  Creigh.  They  do  that  now  in  that  manner.  The  packers 
suffer  thousands  of  dollars  of  losses  even  where  they  think  they  have 
a perfectly  good  case  if  it  could  be  promptly  settled. 

Mr.  Tincher.  Can’t  you  tell  when  cattle  are  tubercular? 

Mr.  Creigh.  I am  only  using  that  as  an  illustration.  Yes,  you  can 
tell;  it  is  a matter  of  getting  down  to  the  proposition  of  having  an 
inspector  who  can  tell  you  to  do  something  instead  of  having  a board 
to  go  through  a lot  of  red  tape.  You  are  subjecting  the  packers  to 
thousands  of  dollars  of  losses,  probably  through  entire  good  faith 
on  the  part  of  some  one,  but  that  puts  the  packer  at  the  mercy  of  a 
subordinate  2,000  miles  away. 

Mr.  McLaughlin  of  Nebraska.  I want  to  say  your  interpretation 
of  any  of  these  bills  that  have  been  introduced  is  entirely  different 
from  mine.  It  has  been  my  thought  all  the  time,  and  I think  I am 
right,  that  any  agency  created  at  Washington  will  have  agents  in  the 
yard  and  everywhere  to  adjust  matters  there  so  far  as  it  is  possible, 
and  that  the  Secretary  of  Agriculture,  or  the  commission,  will  be 
making  a constant  study  of  this  whole  question,  the  supervisory  part 
of  it,  and  there  will  be  a man  in  every  place  where  live  stock  is  dealt 
in  to  have  direct  dealings  with  the  matters  that  arise  from  time  to 
time  and  day  to  day.  Nobody  has  thought  of  handling  this  matter 
2,000  miles  distant. 


MEAT  PACKER. 


325 


Mr.  Creigh.  But  as  your  bill  reads  there  everything  in  the  way  of 
procedure  is  done  here  at  Washington.  If  you  will  write  the  other 
thing  into  the  bill  I will  probably  be  with  you.  But  I want  to  say 
that  I have  been  up  against  commissions  2,000  miles  away  for  15. 
years.  I am  talking  about  getting  away  from  that  so  that  we  can 
get  prompt  action,  just  what  the  shipper  of  live  stock  wants  and 
needs. 

The  Chairman.  If  I were  in  the  packing  business,  I should  prefer 
to  have  some  agency  in  Washington  to  tell  me  to  cease  and  desist 
from  something  that  is  unlawful  rather  than  be  haled  into  court. 
Let  the  department  in  Washington,  whatever  it  may  be,  say  what 
the  rules  and  regulations  shall  be,  so  that  I might  know  exactly  what 
to  do.  I would  rather  have  an  agency  in  Washington  to  say  that  I 
should  cease  and  desist  from  this  or  that,  rather  than  be  haled  into 
court. 

Mr.  Creigh.  I am  not  talking  about  being  haled  into  court. 

The  Chairman.  If  you  make  a thing  unlawful  and  a complaint  is 
filed  you  must  go  into  court  for  a hearing.  One  way  is  to  go  to  the 
Department  of  Agriculture,  and  another  is  to  the  courts.  It  seems 
to  me  it  would  be  better  to  give  the  Department  of  Agriculture 
authority  over  these  things  than  to  have  disputes  taken  into  court 
for  settlement. 

Mr.  Creigh.  Mr.  Chairman,  you  are  missing  the  point  we  have  in 
mind.  A moment  ago  we  had  a case  where  Congressman  Tincher 
thought  some  commission  man  was  being  discriminated  against. 
That  is  a case  where  perhaps  the  power  would  not  be  so  important, 
but  it  ought  to  be  settled  right  there. 

Mr.  Tincher.  No;  he  was  forced  to  discriminate  against  a pro- 
ducer. 

Mr.  Creigh.  In  the  matter  of  discrimination  I agree  with  the  Con- 
gressman; we  would  want  to  know  what  is  right  and  proper.  But 
suppose,  under  the  elasticity  of  the  phraseology  of  the  bills,  it  is 
said  that  nobody  shall  construe  it  as  discrimination  unless  it  amounts 
to  50  cents  a hundred  higher  than  the  previous  man  bid. 

The  Chairman.  Oh,  no. 

Mr.  Creigh.  You  say  it  is  absurd.  I tell  you  that  there  are  thou- 
sands of  things  occurring  all  the  time  that  are  equally  absurd.  None 
of  us  want  discrimination,  but  you  can  see  that  there  will  be  hun- 
dreds of  instances  day  after  day  in  different  parts  of  the  country 
where  different  things  will  come  up  which  may  be  called  discrimi- 
nation. 

The  Chairman.  If  that  rule  is  made  in  Washington,  it  will  con- 
tinue as  a rule  and  will  be  enforced. 

Mr.  Creigh.  But  there  may  be  all  sorts  of  different  things  that  will 
come  up  that  under  such  a general  rule  might  be  called  discrimina- 
tion at  one  point  and  not  at  another. 

The  Chairman.  The  Secretary  of  Agriculture  is  under  the  Presi- 
dent of  the  United  States,  and  do  you  think  either  the  Secretary  or 
the  President  would  tolerate  any  condition  of  that  kind  ? 

Mr.  Creigh.  I do  not  see  how  he  could  help  it.  If  they  make  a. 
regulation  under  some  one  of  these  bills  then  the  packer  could  not 
get  into  court. 

The  Chairman.  If  it  is  the  law  then  it  becomes  a criminal  offense. 
It  must  either  be  a law  or  else  you  must  have  a regulation  that  will 
settle  such  matters. 


326 


MEAT  PACKER. 


Mr.  Tincher.  There  is  no  bill  that  does  not  give  the  packer  his 
day  in  court. 

Mr.  Creigh.  I say  as  a lawyer  with  experience  that  as  a matter  of 
law  under  a bill  that  says  a regulation  may  be  put  into  effect,  then 
we  can  not  get  into  court  on  that  regulation,  as  to  whether  it  is  arbi- 
trary or  unreasonable  or  unjust  or  anything  of  that  kind,  unless  one 
circumstance  occurs,  and  that  is  that  the  regulation  is  entirely  out- 
side of  the  provisions  of  the  law. 

Mr.  Tincher.  What  bill  is  that  in  ? 

Mr.  Creigh.  In  the  bill  that  says  any  regulation  may  be  made. 
I say  the  law  is  that  up  until  the  time  that  that  regulation  under  the 
discretion  of  the  administrative  authority  is  outside  of  the  authority 
of  the  commission,  it  can  not  be  attacked  on  the  ground  that  it  is 
unreasonable  or  unjust.  That  is  a very  serious  situation. 

The  Chairman.  Do  you  contend  that  you  do  not  have  the  right 
of  appeal  to  the  courts  ? 

Mr.  Creigh.  Under  orders  to  cease  and  desist,  yes.  But  that  is 
wholly  different  from  a regulation. 

Mr.  Voigt.  That  proposition  is  in  the  Gronna  bill  which  is  now 
the  McLaughlin  bill  here. 

Mr.  Creigh.  I want  you  to  understand  this,  which  is  a part  of  our 
fear  and  which  I think  will  appeal  to  your  sense  of  fairness.  Here  is 
the  meat  inspection  act.  Under  that  act  it  says  that  meats  shall  not 
be  sold  under  deceptive  names.  Twenty-five  years  before  the  meat- 
inspection  act  came  along  it  was  customary  to  make  sausage  with 
5 per  cent  of  corn  meal.  That  corn  meal  bound  it  together  and  it 
was  palatable  and  clean.  For  the  first  five  years  under  the  meat- 
inspection  act  that  was  all  right.  Somebody  then  came  along  and 
said:  “ There  is  too  much  corn  meal  used  in  sausage.’’  They  fixed  a 
formula  under  which  we  should  make  sausage.  Then  they  said:  “If 
you  do  not  make  sausage  under  this  formula,”  I think  it  was  with  3 
per  cent  of  corn  meal,  “you  can  not  call  it  sausage.”  There  was  no 
hearing  on  that  regulation  at  all  before  it  went  into  effect,  reducing 
the  corn  meal  content.  Of  course,  that  made  more  meat  content, 
and  therefore  a more  costly  piece  of  goods.  The  packers  were  being 
punished  in  competition  with  State  or  local  plants  that  were  not 
under  the  inspection.  We  went  through  the  Supreme  Court  of  the 
United  States  on  that  matter,  and  that  court  held  that  under  the 
provision  of  the  meat  inspection  act  that  one  could  not  use  a decep- 
tive name;  the  Secretary  of  Agriculture  had  the  right  to  prescribe 
a formula  under  which  sausage  could  be  made.  We  never  had  a 
day  in  court  and  never  had  a hearing  before  the  Secretary  in  the 
matter  of  that  formula.  We  tried  for  years  to  get  away  from  the 
thing,  which  is  not  protecting  the  public  from  any  State  or  local 
plant  and  it  puts  us  out  of  line  competitively. 

Mr.  Tincher.  Don’t  you  think  that  is  right?  Suppose  you  had 
used  25  per  cent  of  corn  meal  in  making  sausage,  would  that  be  right  ? 

Mr.  Creigh.  It  was  said  that  if  we  used,  I think,  10  per  cent  or 
more  of  corn  meal,  it  should  be  marked  sausage  plus  10  per  cent  or 
more,  as  the  case  might  be.  We  have  constantly  contended  with 
regulations  of  one  kind  and  another  and  can  not  get  our  day  in  court 
on  them.  In  this  case  we  can  not  say  a product  is  sausage  even  if 
we  use  10  per  cent  of  corn  meal  in  it,  while  others  can.  It  is  a com- 
mercial proposition. 


MEAT  PACKER. 


327 


The  Chairman.  Well,  how  about  regulations  ? 

Mr.  Cretgh.  When  you  come  to  use  the  word  “regulation”  in 
these  bills  we  want  to  get  our  day  in  court  or  a hearing  before  the 
Secretary  of  Agriculture  in  any  case.  The  making  of  regulations  is  a 
pretty  big  thing. 

The  Chairman.  You  will  have  your  day  in  court  or  a hearing 
before  the  Secretary. 

Mr.  Creigh.  Well,  these  bills  do  not  prescribe  that  right.  The 
McLaughlin  bill  speaks  of  regulation  but  does  not  say  anything  about 
a day  in  court.  We  are  fearful  of  that  situation.  I can  show  you 
hundreds  of  regulations  that  the  bulk  of  the  time  may  be  all  right, 
but  when  we  get  down  to  a definite  case  there  may  be  hundreds  and 
thousands  of  dollars  loss  through  somebody  trying  to  press  an  ideal 
as  to  what  shall  be  done.  Yet  the  practical  man  who  has  to  hold 
the  pocketbook  must  stand  the  gaff.  That  is  what  makes  us  fearful 
of  any  such  situation. 

The  Chairman.  Do  you  think  we  could  pass  a law  providing  for 
any  rules  and  regulations  that  may  not  sometimes  work  a hardship  ? 
Take  the  meat-inspection  act,  that  has  worked  some  hardships,  I 
have  no  doubt.  I am  aware  of  that,  but  on  the  whole  the  law  is  a 
good  law. 

Mr.  Creigh.  On  the  whole  it  is  an  excellent  law. 

The  Chairman.  Well,  will  not  the  proposed  law  be  the  same?  I 
do  not  refer  to  any  particular  bill,  but  any  general  bill  that  we  may 
report  out  ? 

Mr.  Creigh.  Do  not  take  what  I say  as  hostile  to  all  of  the  bills. 
I am  merely  trying  to  give  you  some  practical  suggestions. 

The  Chairman.  These  questions  are  asked  for  the  purpose  of  get- 
ting an  idea  of  what  you  people  have  experienced. 

Mr.  Creigh.  I would  like  to  have  you,  gentlemen,  thinking  about 
the  difference  between  a regulation  operative  in  a manufacturing 
house  and  a plant  having  to  do  with  a live  animal,  say,  a steer, 
which  is  a physical  object.  I would  like  to  have  you  thinking  about 
that  before  I come  before  you.  I would  like  to  have  you  thinking  of 
the  difference  between  getting  a regulation  as  to  how  business  shall 
be  done  as  between  the  current  customs  of  the  people  doing  the  busi- 
ness and  the  making  of  contracts  and  the  meeting  of  mind  and  mind 
on  these  things.  There  is  such  an  infinite  difference  between  the 
trading  proposition  and  the  manufacturing  end  of  it  that  it  does  not 
work  out.  If  the  evils  complained  of  are  in  connection  with  trading 
in  the  stockyards,  where  the  people  have  complaints,  we  want  a 
remedy.  We  do  not  want  any  unfairness.  We  want  an  honest  deal. 
If  our  employees  are  doing  things  improperly  the  quicker  we  learn  of 
it  the  better.  I want  some  system  out  in  the  yards  that  will  be  satis- 
factory. But,  I say,  use  the  machinery  in  the  exchanges,  and  you 
might  add  the  packers  and  the  producers  plus  Government  super- 
vision, and  that  would  give  the  matter  prompt  attention.  Then  we 
would  be  away  from  the  dangers  of  regulation. 

The  Chairman.  There  may  be  transactions  outside  the  stockyards 
which  are  just  as  proper  to  regulate.  For  instance,  here  a question 
has  been  raised  about  the  use  of  cars,  certain  ones  have  alleged  that 
certain  packers  have  discriminated  against  them  in  the  furnishing  of 
cars,  as  well  as  a number  of  other  things.  There  may  not  be  any- 
thing to  it,  but  if  so,  then  legislation  will  not  hurt  anybody. 


328 


MEAT  PACKER. 


Mr.  Creigh.  Certainly  legislation  hurts  if  you  give  people  power 
to  do  things  that  will  come  back  into  your  business. 

The  Chairman.  If  there  are  no  unfair  practices,  regulation  or 
laws  will  not  hurt  anybody. 

Mr.  Creigh.  You  appoint  a commission  and  you  give  somebody 
some  authority,  and  in  order  to  hold  his  job  what  is  he  going  to  do? 
He  is  going  to  find  something,  isn’t  he  ? 

The  Chairman.  That  may  be  true.  But  the  bankers  are  under 
inspection.  There  are  rules  and  regulations  issued  here  in  Wash- 
ington as  to  them. 

Mr.  Creigh.  Yes. 

The  Chairman.  If  you  go  into  a bank  I think  the  banker  will  say 
he  is  glad  for  an  inspector  to  come  around  and  call  attention  to 
different  things,  probably  to  excessive  loans,  or  heavy  rediscounts. 
The  banker  would  rather  have  an  inspector  come  to  him  and  tell 
him  to  cease,  and  desist,  instead  of  calling  him  into  court.  He  pre- 
fers his  day  in  court  with  the  examiner. 

Mr.  Hormel.  My  standpoint  on  that  is  simply  this.  The  bank  in- 
spection is  for  the  purpose  of  protecting  the  public. 

The  Chairman.  Exactly. 

Mr.  Hormel.  Unlike  the  packing  house,  the  bank  is  intrusted  with 
public  money.  That  corresponds  with  the  way  the  packing  house  is 
intrusted  with  the  public  health,  according  to  my  mind.  That  is  in 
the  matter  of  not  giving  the  public  unhealthy  food.  Corresponding 
to  bank  examinations,  we  have  examinations  now  protecting  the  pub- 
lic in  the  matter  of  inspecting  meats  to  see  that  no  improper  meats  are 
furnished  the  public.  The  bank  is  inspected  as  to  the  public  money, 
and  so  we  have  in  the  packing  house  a system  of  inspectors  which  are 
parallel,  and  which  protect  the  people  from  receiving  from  packing 
houses  impure  meats.  That  protects  the  public  health  just  as  the 
bank  examination  protects  the  public’s  money.  But  there  is  no  legis- 
lation that  I know  of  to  prohibit  a banker  from  doing  the  things 
which  are  generally  illegal.  Those  are  prohibited  by  general  laws. 
They  are  not  prohibited  that  I know  of  by  any  specific  regulations. 
Why  shouldn’t  we  be  in  the  same  category? 

Mr.  Tincher.  Let  us  see.  The  rate  of  interest  is  regulated  by  law. 

Mr.  Hormel.  I would  call  that  parallel  to  Mr.  Creigh’s  explanation 
about  corn  meal. 

Mr.  Creigh.  How  about  discrimination  in  the  case  of  a banker  as  to 
loaning  money  or  anything  of  that  kind  ? 

Mr.  Tincher.  They  discriminate  in  favor  of  securities. 

The  Chairman.  We  have  the  prevailing  sentiment  and  we  have  the 
report  of  the  Federal  Trade  Commission,  and  I want  to  say  that  I have 
refrained  from  referring  to  that  and  raising  those  questions.  We  had 
that  matter  up  last  year  and  talked  about  it  for  40  days.  I do  not 
think  it  necessary  to  take  that  matter  up  this  year.  But,  as  I started 
to  say,  we  have  the  prevailing  sentiment,  and  these  reports,  and  many 
people  believe  that  there  is  something  wrong  about  the  packing  busi- 
ness and  that  it  should  be  looked  into.  That  does  not  apply  to  other 
interests  right  now.  If  that  sentiment  prevailed  as  to  other  matters, 
I take  it  we  should  take  such  matters  up  with  just  as  much  earnestness 
as  we  are  now  taking  this  up. 

Mr.  Hormel.  May  I make  this  point:  I believe  it  is  entirely  right 
and  feasible  that  legislation  should  be  enacted  governing  the  packing 


MEAT  PACKER. 


329 


industry  wherein  it  is  actually  different  from  any  other  industry. 
But  I do  not  believe  there  should  be  legislation  enacted  saying  that 
the  packer  must  be  honest.  Everybody  must  be  honest.  I do  not 
believe  that  legislation  should  say  that  the  packer  must  be  square, 
because  everybody  must  be  square. 

The  Chairman.  We  can  not  legislate  integrity  into  anybody. 

Mr.  Hormel.  No.  I do  not  think  you  can  do  any  more  there  than 
you  have  under  the  law  at  this  time. 

Now,  gentlemen  of  the  committee,  to  get  back  to  Mr.  Tincher’s 
example  of  improper  practices,  wouldn’t  it  be  possible  to  stop  any  ill 

gractices  such  as  Mr.  Tincher  mentioned  by  regulating  the  stockyards  ? 

ould  not  you  provide  that  no  one  packer,  nor  anyone  who  came  into 
the  stockyard  business,  could  deal  in  live  stock  on  a basis  unfair  to 
the  producer  ? 

The  Chairman.  If  there  are  any  evil  practices  anywhere  may  they 
not  be  in  the  stockyards  also  ? 

Mr.  Hormel.  Perhaps  so. 

The  Chairman.  If  that  is  true,  this  bill  covers  that  matter.  If 
there  is  any  discrimination  in  regard  to  cars,  why  not  apply  it  to  that  ? 
Why  not  have  a bill  that  covers  all  the  practices  that  are  found  to  be 
wrong  ? 

Mr.  PIormel.  If  the  committee  will  not  object,  I would  like  to  con- 
sider the  matter  from  this  point  of  view:  What  is  necessary  to  be 
done  in  order  to  do  away  with  practices  that  are  supposed  to  have 
been  engaged  in  and  that  ought  not  to  be  engaged  in  ? 

Mr.  Tincher.  I think  the  average  well-informed  man  thinks  the 
whole  thing  is  wrong  on  just  about  the  basis  of  the  specific  instance 
I have  called  attention  to.  I think  that  is  the  prevailing  sentiment 
not  among  the  ignorant  class,  but  based  on  the  background,  as  some- 
one called  it  this  morning,  and  upon  conditions.  I think  the  feeling 
is  that  the  whole  industry  is  running  along  that  line.  That  being 
true,  what  would  be  the  idea  in  passing  legislation  having  supervision 
over  a part  of  it  and  not  having  supervision  over  all  ? 

Mr.  Hormel.  Well,  simply  this,  am  I correct  in  my  understanding 
that  all  the  complaints  that  have  been  made  by  anyone  who  claims 
to  have  been  in  any  way  hurt  are  complaints  against  practices  that 
occur  in  the  stockyards  ? 

The  Chairman.  Oh,  no.  There  is  the  wiring  on,  and  a number  of 
other  things.  But  I think  the  majority  of  the  things  complained  of 
are  complained  of  as  occurring  in  the  stockyards. 

Mr.  Hormel.  If  we  can  clean  up  the  stockyards,  can  we  not  clean 
up  the  most  of  the  difficulties  % 

The  Chairman.  If  it  is  necessary  to  clean  up  the  stockyards,  why 
not  clean  up  all  along  down  the  line  ? 

Mr.  Hormel.  My  point  of  differentiation  is  that  the  stockyards  is 
the  point  at  which  the  packing  industry  is  different  from  other  in- 
dustries. I would  no  more  resent  a law  to  regulate  the  stock- 
yards  than  I would  resent  Mr.  Tincher’s  bill  relating  to  whaet  futures. 
The  part  of  the  act  I do  not  like  is  the  part  where  it  says:  Mr.  Packer, 
you  must  be  honest.  That  leaves  the  inference  that  he  is  not  honest. 
Now,  there  may  be  some  who  are  not,  but  I am,  and  I do  not  want 
any  legislative  inference  in  that  way.  Maybe  that  is  an  unreason- 
able standpoint,  but  that  is  my  view  of  it. 


330 


MEAT  PACKER. 


The  Chairman.  The  bill  would  not  reflect  upon  the  packer  any 
more  than  on  the  trader  or  the  commission  man  in  the  yard.  If  it 
is  necessary  to  regulate  the  one  why  not  regulate  another  ? 

Mr.  Hormel.  I do  not  care  to  admit  that  the  packer  or  the  trader 
in  the  yard  is  on  a different  footing  from  the  boot  man  or  the  shoe 
man  or  the  miller. 

WThe  Chairman.  Some  people  may  think  that  all  the  packers  are 
crooks  and  dishonest  and  all  that  sort  of  thing.  I can  not  agree  with 
that  view;  nor  do  I think  the  fact  that  regulation  is  suggested  im- 
plies that  everybody  is  dishonest  or  even  that  any  considerable  num- 
ber are  dishonest. 

Mr.  Hormel.  What  I believe  I can  say  is  this,  that  in  order  to 
accomplish  the  ends  desired  the  first  part  of  your  bill  is  nor  really 
necessary.  As  to  the  second  part  of  the  bill,  that  relating  to  the 
stockyards — though  I am  not  a stockyard  man  and  may  be  that  is 
not  satisfactory  to  the  stockyard  man — but  as  to  that  it  is  to  me 
perfectly  satisfackuy. 

Mr.  Tincher.  Here  is  a little  proposition,  as  you  seem  to  want 
some  specific  instance.  It  is  stated  here  in  tbis  report  of  the  Federal 
Trade  Commission,  speaking  of  conditions  at  Wichita,  Kans. 

Mr.  Creigh  (interposing).  Don’t  you  want  to  save  that  until  I 
get  on  ? 

Mr.  Hormel.  Let  him  shoot. 

Mr.  Tincher.  Well,  I was  really  reading  that  for  Mr.  Creigh’s 
benefit.  I believe  I will  wait  for  him. 

The  Chairman.  Mr.  Hormel,  are  you  furnished  with  cars  as  regu- 
larly as  are  the  other  packers  ? Is  there  any  discrimination  along 
that  line  ? You  have  brought  in  the  stockyard  proposition,  and  you 
say  you  are  on  an  even  footing  with  the  rest  of  them  in  that  matter; 
now,  how  about  cars  ? Are  you  always  supplied  with  cars  ? 

Mr.  Hormel.  There  was  a period  about  a year  ago  when  there  was 
a shortage  of  refrigerator  cars.  As  nearly  as  I could  make  out,  the 
moving  time  on  the  railroads  was  so  slow  that  round  trips  made  by 
cars  required  such  a long  period  of  time  that  really  there  were  not 
sufficient  refrigerator  cars  to  move  all  of  the  products. 

Mr.  Jones.  Do  you  use  railroad  refrigerator  cars  ? 

Mr.  Hormel.  Up  until  the  advent  of  that  period,  or  shortly  before 
that,  when  we  had  gotten  some  cars. 

Mr.  Jones.  Are  you  using  your  own  cars  now? 

Mr.  Hormel.  We  are  using  100  of  them. 

Mr.  Jones.  How  many  of  the  railroad  company’s  cars  do  you  use 
in  addition  to  those,  on  an  average  ? 

Mr.  Hormel.  Eight  now  the  round  trips  of  cars  has  gotten  to  a 
point  where  our  own  cars  practically  satisfy  our  needs.  On  the  other 
hand,  a year  ago  our  own  cars  would  not  half  satisfy  our  needs. 

Mr.  Jones.  Do  you  get  satisfactory  service  out  of  cars  furnished  by 
railroad  companies? 

Mr.  Hormel.  No,  sir;  and  for  this  reason,  that  the  railroad  com- 
panies let  their  cars  run  down  so  badly  we  have  to  spend  a lot  of  money 
fixing  them  up  before  we  can  ship  fresh  meats.  It  was  for  that  reason 
we  decided  it  would  be  more  economical  to  use  our  own  cars  in  good 
condition  than  to  be  patching  up  the  cars  of  the  railroad  companies. 

The  Chairman.  Do  you  hire  your  cars  or  buy  them  ? 

Mr.  Hormel.  We  have  our  cars  rented  at  an  average  cost  of  $35 
a month. 


MEAT  PACKER. 


331 


The  Chairman.  How  much  did  it  cost  you  to  repair  the  cars 
furnished  by  the  railroads  ? 

Mr.  Hormel.  Well,  I have  no  figures  on  that  point  in  mind.  On 
one  car  we  might  spend  $10  and  on  another  car  $15,  and  maybe  on 
another  car  nothing  at  all.  In  addition  there  was  another  thing  that 
went  hand  in  hand  with  the  cost  in  the  matter  of  shipping  beef. 
The  cars  furnished  by  the  railroad  companies  were  not  fixed  up 
properly  for  the  shipment  of  beef.  We  had  to  put  rails  in,  4 by  4’s, 
and  that  cost  us  $16  a car.  In  addition  we  were  unable  to  use  beef 
hooks  on  the  4 by  4’s,  so  we  had  to  tie  the  beef  up  with  strings, 
and  that  in  some  cases  cut  the  beef  so  that  we  had  to  take  less  money 
for  it. 

The  Chairman.  The  fact  is  that  the  railroads  do  not  furnish  proper 
equipment  for  the  shipment  of  meats  ? 

Mr.  Hormel.  Not  for  beef.  For  fresh  pork  they  do  have  some  cars 
that  are  satisfactory.  During  the  war  the  railroad  cars  had  run  down 
to  such  an  extent  that  even  for  fresh  pork  they  were  not  satisfactory 
without  repairs. 

The  Chairman.  The  fact  is  that  practically  every  packer  is  com- 
pelled to  furnish  his  own  cars,  to  either  own  or  rent  them  ? 

Mr.  Hormel.  Yes,  sir.  And  I think  that  is  rather  a satisfactory 
basis.  During  the  past  five  years  our  business  has  not  expanded  such 
a terrible  lot,  but  I have  had  acquaintances  in  the  East  say  to  me  that 
they  imagined  our  business  had  gotten  much  larger  from  seeing  our 
cars  on  the  railroads.  There  is  a certain  amount  of  advertising 
benefit  from  that. 

The  Chairman.  You  get  mileage  on  your  cars,  don’t  you? 

Mr.  Hormel.  Yes,  sir. 

The  Chairman.  You  figure  that  it  is  more  economical  to  own  cars 
than  to  have  them  furnished  by  the  transportation  companies  ? 

Mr.  Hormel.  We  get  1 cent  a mile  as  mileage  covered  by  our  cars. 
For  each  car  the  past  two  months  the  mileage  has  been  1,900  miles  a 
month.  That  would  leave  us  $16  a month  to  make  up  the  rental 
of  $35. 

The  Chairman.  You  say  they  cost  you  about  $16  per  car? 

Mr.  Hormel.  It  would  cost  us  $16  to  fit  up  one  railroad  car. 

The  Chairman.  You  are  really  money  ahead,  aren’t  you? 

Mr.  Hormel.  Absolutely;  yes,  sir. 

Mr.  Kincheloe.  Do  you  own  100  cars? 

Mr.  Hormel.  No,  sir;  we  lease  them. 

Mr.  Kincheloe.  Whom  do  you  lease  them  from? 

My.  Hormel.  From  the  Marsh  Refrigerator  Car  Line  Co.  of 
Milwaukee. 

Mr.  Kincheloe.  If  we  should  pass  an  act  requiring  the  trans- 
portation companies  to  furnish  cars  and  prescribe  for  their  ownership 
of  cars,  would  it  work  to  disadvantage  to  the  packers  ? 

Mr.  Hormel.  If  they  would  furnish  beef  cars,  although  we  would 
lose  whatever  advertising  value  we  now  have,  we  would  be  ahead. 
We  would  not  have  to  spend  $16  a month,  but  would  lose  the  adver- 
tising. 

Mr.  Kincheloe.  You  would  have  the  certainty  of  having  properly 
equipped  cars. 

Mr.  Hormel.  Yes,  sir.  There  are  several  types  of  refrigerator 
cars.  There  is  the  open-bunker  car,  and  the  brine-tank  car,  and  the 
fruit  and  vegetable  car. 


332 


MEAT  PACKER. 


Mr.  Ivincheloe.  Having  gone  into  that,  tell  us  about  stock  cars. 

Mr.  Hormel.  We  have  no  stock  cars. 

Mr.  Kincheloe.  Have  you  been  furnished  with  stock  cars  at 
all  times  ? 

Mr.  Hormel.  Do  you  mean  have  our  shippers  been  furnished  with 
them  ? 

Mr.  Kincheloe.  Yes. 

Mr.  Hormel.  There  have  been  interruptions.  There  was  an  inter- 
ruption about  the  same  time  as  this  refrigerator  car  shortage,  when 
there  was  a stock  car  shortage.  We  have  had  difficulties  from  that 
source  for  several  reasons.  One  was  as  I recall  from  the  improper 
handling  by  the  railroads.  I was  forced  to  make  a trip  to  Wash- 
ington to  get  action  from  the  car-service  department  of  the  Inter- 
state Commerce  Commission,  to  get  that  corrected,  because  the 
railroads  claimed  they  could  not  do  anything  for  us  inasmuch  as 
the  cars  were  alloted  by  the  Washington  office. 

Mr.  Kincheloe.  The  larger  packers  own  stock  cars  as  well  as 
refrigerator  cars,  don’t  they  ? 

Mr.  Hormel.  Yes,  sir. 

Mr.  Tincher.  Is  that  right  ? Do  the  large  packers  own  stock  cars  ? 

Mr.  Hormel.  Yes. 

Mr.  Creigh.  Some  of  them  do,  for  the  movement  of  live  cattle 
for  slaughter  in  the  East. 

The  Chairman.  You  know  of  the  talk  about  this  in  our  section 
of  the  country.  You  are  familiar  with  the  talk  going  on  in  our 
section  of  the  country,  the  complaint  is  that  the  smaller  packers 
have  been  discriminated  against  in  not  being  furnished  with  cars. 
What  is  the  situation  there  ? I am  asking  for  information. 

Mr.  Hormel.  Well,  I believe  I know  what  you  refer  to,  Mr. 
Haugen. 

The  Chairman.  No;  I do  not  refer  to  any  special  case.  It  is 
simply  the  gossip  that  goes  on.  What  is  there  to  it?  That  is  all 
I am  interested  in. 

Mr.  Hormel.  Swift  & Co.  for  one  that  I am  sure  of,  and  I believe 
there  are  some  others — well,  I do  not  know  but  I believe  there  are 
others;  but  I know  that  Swift  & Co.  have  their  own  stock  cars 
coming  to  our  territory.  That  is,  territory  that  is  within  100  miles 
of  us,  and  are  taking  hogs  to  the  East. 

Mr.  Veeder.  Let  me  just  correct  that.  That  is  not  Swift  & Co. 
That  is  the  Swift  live-stock  express.  It  is  not  owned  by  Swift  & 
Co.  It  is  owned  by  eastern  packing  houses  or  their  stockholders 
for  the  purpose  of  transporting  hogs  from  the  West  to  the  packing 
houses  in  the  East.  Swift  & Co.  own  no  live-stock  cars. 

Mr.  Thompson.  Why  do  they  use  that  name  ? 

Mr.  Veeder.  Because  it  is  owned  largely  by  people  by  the  name 
of  Swift.  Swift  & Co.  do  not  own  them. 

Mr.  Thompson.  Are  they  the  same  people,  the  same  Swifts? 

Mr.  Veeder.  Yes;  the  largest  stockholder  of  the  Swift  Refrigerator 
Transportation  Co.  is  the  estate  of  G.  F.  Swift,  deceased. 

Mr.  Kincheloe.  Do  you  have  to  pay  $16  for  every  refrigerator 
car  you  get  from  a railroad  company  ? 

Mr.  Hormel.  Oh,  no.  All  I have  said  is  that  when  we  want  to 
ship  beef  in  a railroad  car  without  beef  rail  equipment  we  have  to 
spend  $16  to  put  the  rails  in. 


MEAT  PACKER. 


333 


Mr.  Kincheloe.  What  do  you  mean  by  the  word  “rails”? 

Mr.  Hormel.  A beef  car  is  railed  overhead. 

Mr.  Kincheloe.  All  right. 

The  Chairman.  What  about  the  cars  sent  to  your  territory  ? 

Mr.  Hormel.  I was  simply  saying  that  Swift’s  cars  come  to  points 
on  the  Mississippi  River  within  100  miles  of  us  and  take  live  stock  to 
eastern  points.  Those  cars,  as  I understand  it,  are  furnished  to 
shippers  who  have  sold  stock  for  shipment  to  eastern  points. 

The  Chairman.  Do  they  give  the  shipper  any  advantage  over 
shipments  to  you  ? 

Mr.  Hormel.  Only  in  case  there  was  a shortage  of  railroad  cars. 
Normally,  no. 

The  Chairman.  Only  in  the  times  when  there  was  a shortage  of 
cars  ? 

Mr.  Hormel.  Yes,  sir. 

The  Chairman.  But  not  generally? 

Mr.  Hormel.  No,  sir. 

The  Chairman.  You  have  not  suffered  by  reason  of  that? 

Mr.  Hormel.  Not  at  all  now.  Only  one  week  that  I ever  knew  of, 
which  was  the  worst  week  during  this  car  shortage. 

Mr.  Tinciier.  What  is  the  object  of  packers  owning  stock  cars? 

Mr.  Veeders.  Let  me  explain  that.  The  western  packing  houses 
that  are  located  at  the  big  stockyards  buy  their  stock  at  the  yards. 
Eastern  slaughterhouses  buy  in  the  West  and  transport  the  live  stock 
from  the  West  in  stock  cars  to  the  East  for  slaughter.  There  is  some 
reason  for  their  owning  their  own  cars.  The  eastern  railroads  do  not 
own  live-stock  cars  to  the  same  extent  that  the  western  roads  do, 
on  which  live  stock  originates  and  is  shipped  to  the  big  live-stock 
centers  and  there  sold.  The  eastern  railroads,  which  have  some  busi- 
ness but  not  nearly  to  the  same  extent,  do  not  provide  themselves 
with  live-stock  cars  to  the  same  extent.  Therefore  it  becomes  im- 
portant to  the  eastern  slaughterers  to  have  their  own  cars  so  that 
they  may  get  their  live  stock  to  the  slaughtering  points  in  the  East. 

Mr.  Purnell.  Can  the  eastern  packers  compete  successfully  with 
the  western  packers  after  having  transported  their  live  stock  across 
the  continent  ? 

Mr.  Veeder.  Yes,  sir;  they  seem  to  survive.  The  eastern  trade 
is  a little  different  from  the  western  trade.  It  is  a little  peculiar  and 
different  in  some  respects,  but  they  compete  successfully. 

Mr.  Purnell.  That  adds  materially  to  the  cost,  does  it  not  ? 

Mr.  Veeder.  No;  I can  not  say  that  it  adds  in  the  long  run.  The 
live  stock  shipped  in  those  cars  is  generally  a little  heavier  and  shrunk 
a little  better  than  the  stock  sold  in  the  western  markets. 

The  great  reason  why  the  eastern  packing  houses  compete  with  the 
western  is  due  to  the  fact  of  the  great  kosher  trade  in  New  York, 
and  somewhat  similarly  at  Boston  and  other  points  along  the  Atlantic 
seaboard.  The  kosher  trade  is  big,  and  it  is  peculiar.  Orthodox 
Jews  require  that  their  meat  be  eaten  within  a short  period,  I think 
48  hours  after  slaughter;  and  also  that  the  live  animal  be  killed  in  a 
peculiar  manner  and  with  peculiar  ceremony.  The  result  is  that  tie 
western  packer  can  not  ship  from  the  West  meat  to  be  eaten  by  the 
large  Jewish  population  in  the  eastern  centers.  They  have  to  ship 
live  stock  to  the  East  for  it  to  be  slaughtered  there.  By  reason  of 
that  fact,  and  the  further  fact  that  a Jew  will  not  eat  the  hind  quar- 


334 


MEAT  PACKER. 


ters,  the  fore  quarters  bring  a little  higher  price  to  the  eastern  packer 
that  is  received  for  fore  quarters  by  the  western  packer.  The  result 
is  that  the  eastern  packer  can  sell  his  hind  quarters  in  competition 
with  the  western  hind  quarters.  He  sells  the  fore  quarter  at  a little 
higher  price  and,  even  if  he  has  to  sell  his  hind  quarter  for  a little  less 
profit  than  the  western  packer,  he  can  keep  up  competition  as  be- 
tween both  fore  quarter  and  hind  quarter. 

Mr.  Tincher.  As  I understand  you  the  eastern  packer  buys 
stock  in  the  West  and  ships  it  to  himself? 

Mr.  Veeder.  Yes,  sir. 

Mr.  Tincher.  The  trade  differs  in  that  respect  ? 

Mr.  Veeder.  Yes,  sir. 

Mr.  Tincher.  The  western  packer  buys  it  at  the  stockyards 
market  ? 

Mr.  Veeder.  Yes,  sir. 

Mr.  Tincher.  Those  cars  are  used  by  the  companies  using  them 
to  ship  stock  to  themselves  that  has  already  been  purchased  ? 

Mr.  Veeder.  Yes. 

The  Chairman.  Mr.  Veeder,  this  may  be  outside  the  question, 
and  probably  this  matter  belongs  to  another  committee,  as  I do  not 
think  this  committee  is  going  to  try  to  amend  the  transportation 
act,  but  I would  like  to  ask  a question  while  on  this  point.  I find 
that  the  total  stock  cars  classified  by  ownership  show  that  Swift  & 
Co.  and  Wilson  & Co.  have  1,670,  or  13  per  cent,  and  that  refers  to 
double  deck  cars;  and  that  in  the  matter  of  single  deck  cars  they 
own  299  or  0.3  per  cent  of  the  total  number.  The  independent 
car  companies  own  1,046  double  deck  and  12,956  single  deck.  So 
that  there  are  a number  of  them  owned  by  packers,  though  it  is 
true  they  are  subsidiary  companies? 

Mr.  Veeder.  I did  not  quite  get  your  question.  The  number  of 
live-stock  cars  owned  by  the  Swift  Livestock  Transportation  Co.  is 
a very  small  part  of  the  total  number  of  live  stock  cars  in  the  country. 

The  Chairman.  Yes.  The  question  was  asked  if  any  of  them 
were  owned  or  controlled  by  the  packers.  So  it  is  shown  that  there 
are  a number  so  owned. 

Mr.  Veeder.  The  Swift  Livestock  Transportation  Co.  owns  a 
small  number  of  cars.  But  I did  not  quite  get  your  question. 

The  Chairman.  Isn't  that  Swift  & Co.  ? 

Mr.  Veeder.  Those  cars  are  owned  by  a separately  owned  cor- 
poration, and  they  are  operated  for  the  benefit  of  eastern  slaughterers. 

The  Chairman.  It  says  Swift  & Co. 

Mr.  Veeder.  Well,  Swift  & Co.  has  no  object  in  owning  and  does 
not  own  any  live-stock  cars.  It  buys  its  live  stock  in  adjacent 
stockyards.  Those  cars  are  owned  for  the  purpose  of  shipping 
livestock  from  the  West  to  the  East  where  the  live  stock  is  slaugh- 
tered. 

The  Chairman.  Do  you  mean  that  Swift  & Co.  has  no  control 
over  those  cars  ? 

Mr.  Veeder.  Swift  & Co.  has  not.  One  of  the  largest  stock- 
holders in  the  Swift  Livestock  Transportation  Co.  is  the  estate 
of  G.  F.  Swift,  and  perhaps  some  other  stockholders  of  Swift  & Co., 
but  Swift  & Co.  do  not  own  any  live-stock  cars. 

Mr.  Tincher.  Do  they  own  cars  or  rent  them  ? 

Mr.  Veeder.  Swift  & Co.  own  the  cars. 


MEAT  PACKER. 


335 


Mr.  Tincher.  Does  your  company  own  refrigerators  cars  or  rent 
them? 

Mr.  Veeder.  That  was  what  I answered. 

Mr.  Tincher.  Well,  I meant  the  other  company  then. 

Mr.  Veeder.  The  Swift  Livestock  Transportation  Co.  owns  its 
cars. 

Mr.  Tincher.  And  does  your  company  own  refrigerator  cars  or 
rent  them  ? 

Mr.  Veeder.  Swift  & Co.  own  refrigerator  cars  indirectly  by  hold- 
ing stock  in  a corporation  organized  to  own  and  operate  so-called 
Swift  refrigerator  cars.  They  are  for  the  purpose  of  transporting 
Swift  & Co.’s  meat  products  to  places  of  sale. 

Mr.  Tincher.  What  is  the  fact  about  the  car  companies  that 
suspended  during  the  war  when  there  was  little  or  no  building  of  cars  ? 
Mr.  Hormel  has  testified  that  he  has  been  able  to  rent  100  cars. 
I am  wondering  if  car  companies  have  cars  available  now. 

Mr.  Veeder.  Swift  & Co.  at  times  rent  a large  number  of  re- 
frigerator cars. 

Mr.  Purnell.  How  many  refrigerator  cars  does  Swift  & Co.  own  ? 

Mr.  Veeder.  Something  between  5,000  and  6,000. 

Mr.  Tincher.  Of  course  the  car  companies  build  sufficient  cars  so 
that  every  man  who  wants  to  rent  a car  can  rent  it,  and  then  if  a 
railroad  company  could  have  refrigerator  cars  for  a man  who  wanted 
them,  even  the  small  packer  could  have  them  ? 

Mr.  Veeder.  Swift  & Co.  would  be  glad  to  abandon  its  refrigerator 
car  service  at  any  time  if  the  railroads  would  furnish  cars  and  the 
necessary  service  along  with  them.  It  would  be  cheaper  for  Swift  & 
Co.  to  operate  that  way.  It  does  not  get  at  the  most  more  than  2 per 
cent  or  3 per  cent  on  the  investment. 

Mr.  Tincher.  Does  your  company  build  cars  ? 

Mr.  Veeder.  Some  of  them  are  built  by  us,  and  I think  the  most  of 
them. 

Mr.  Tincher.  There  are  companies  in  the  business  building 
refrigerator  cars  and  renting  them  ? 

Mr.  Veeder.  Yes,  sir. 

Mr.  Tincher.  You  do  not  rent  your  cars  from  Swift  & Co.,  do  you, 
Mr.  Hormel? 

Mr.  Hormel.  No,  sir.  We  rent  our  cars  from  the  Marsh  Refrigera- 
tor Car  Line  Co.,  of  Milwaukee.  A number  of  other  packers  do  the 
same  thing. 

Mr.  Tincher.  And  if  I had  a packing  house  at  Wichita  I suppose 
I could  rent  a refrigerator  car  on  the  same  terms  that  you  do  ? 

Mr.  Hormel.  Yes,  sir. 

Mr.  Tincher.  If  I did  not  want  to  own  any  cars  and  have  the 
advantage  gained  from  having  my  own  cars,  a private  car  transporta- 
tion company  would  furnish  them  to  me  on  a rental  basis  ? 

Mr.  Hormel.  Yes,  sir. 

Mr.  Tincher.  During  the  war  the  car  building  companies  stopped, 
as  I understand.  I wondered  if  there  was  any  loosening  up  ? Isn’t 
that  true  about  the  building  of  stock  cars  ? 

Mr.  Hormel.  Any  kind  of  cars.  You  will  not  hear  any  trouble 
about  stock  cars  now.  There  are  lots  of  them  on  the  side  tracks. 

Mr.  Jones.  That  is  largely  because  of  the  financial  depression  and 
slack  business  everywhere,  isn’t  it? 


336 


MEAT  PACKER. 


Mr.  Hormel.  No,  sir.  It  is  because  the  cars  are  moving  faster. 
Scranton,  Pa.,  is  one  point  where  we  ship  to  every  week.  A year  ago 
to-day  we  could  figure  on  from  8 to  10  days  in  getting  a shipment  from 
Austin,  Minn.,  to  Scranton,  Pa.  Now  we  always  get  there  the  sixth 
day  and  sometimes  in  even  less  time. 

Mr.  Creigh.  Plow  about  coming  back.  Can  you  give  any  figure 
on  that  ? 

Mr.  Hormel.  I believe  our  traffic  man  testified  in  the  groceries 
case  that  our  refrigerator  cars  were  making  a monthly  mileage  of 
1,100  miles  a year  ago  and  now  they  are  making  1,900  miles. 

Mr.  Purnell.  You  do  not  get  any  credit  by  reason  of  this  expendi- 
ture of  $16  you  were  forced  to  make  in  order  to  put  the  railroad 
company’s  car  in  condition  where  you  could  use  it? 

Mr.  Hormel.  No,  sir;  that  was  wasted.  And  I do  not  believe 
there  is  a house  in  the  country  handling  any  volume  of  beef  and  which 
is  under  the  necessity  of  having  refrigerator  cars,  that  has  not  its 
own  beef  cars  in  sufficient  numbers  to  take  care  of  its  beef  shipments. 
You  heard  Mr.  Creigh  say  the  other  day  that  they  used  railroad 
equipment  route  cars  but  used  their  own  cars  for  beef. 

Mr.  Tincher.  When  you  use  these  cars  to  ship  beef  in  and  expend 
$16  to  equip  them,  does  that  become  a permanent  equipment? 

Mr.  Hormel.  No,  sir. 

Mr.  Tincher.  What  I do  not  understand  about  the  situation  is 
this:  The  transportation  act  requires  railroad  companies  to  furnish, 
or  makes  it  possible  for  the  Interstate  Commerce  Commission  to 
require  railroad  companies  to  furnish,  this  means  of  transportation. 
And  there  are  car-building  companies  providing  these  cars  on  a 
rental  basis,  and  you  have  rented  from  such  companies  the  cars  you 
have.  Why  can  not  a transportation  company  have  the  same  kind 
of  car  that  you  are  renting  ? 

Mr.  Hormel.  For  this  reason,  that  the  transportation  company 
of  course  is  interested  primarily  in  getting  mileage  out  of  its  cars. 
The  packer  is  interested  primarily  in  getting  service  out  of  his  cars. 
Now,  then,  the  Chicago,  Milwaukee  & St.  Paul  Railroad,  for  instance, 
the  principal  road  serving  us,  would  refuse  to  have  10  beef  cars 
standing  on  the  sidetrack  at  Austin  earning  nothing  on  the  possi- 
bility that  we,  in  whom  they  are  not  financially  interested,  would 
use  them  at  some  time. 

Mr.  Tincher.  My  question  does  not  go  to  that.  My  question  is, 
if  I do  want  to  get  a car,  or  if  they  rent  these  cars,  why  can  not  they 
rent  a correctly  equipped  car  as  well  as  a car  not  properly  equipped  ? 

Mr.  Hormel.  They  would  not  be  able  to  keep  a sufficient  supply 
on  a side  track  to  take  care  of  our  needs.  With  us  we  know  how 
many  cars  we  have  in  service,  where  they  have  gone  to,  and  approxi- 
mately when  they  will  come  back.  If  the  railroad  company  was 
furnishing  us  with  that  equipment  we  would  not  know  whether  they 
were  going  to  give  us  10  cars  to-morrow  and  1 car  the  next  day  or 
how  many.  Therefore  if  the  railroad  company  were  to  furnish  that 
equipment  they  would  have  to  have  many  times  the  amount  of  beef 
equipment  that  it  is  necessary  for  us  to  have  in  order  to  handle  our 
business,  because  we  can  really  distribute  our  beef  in  them  to  better 
advantage  than  they  can.  It  is  for  this  reason  I say  that  it  is  imprac- 
ticable because  of  the  gigantic  expense  attached  to  the  matter  for 
the  railroads  to  do  it.  That  is  the  reason  I believe  why  the  Interstate 


MEAT  PACKER.  337 

Commerce  Commission  has  never  seen  fit  to  enforce  that  provision 
of  the  act. 

Mr.  Tincher.  I understand  that  situation,  and  I am  not  com- 
plaining of  the  privately  used  car.  I do  not  think,  possibly,  it 
would  be  necessary  to  force  companies  to  quit  using  their  own  cars. 
But  what  I can  not  understand  is  this,  if  the  railroad  company  gets 
a car  and  rents  it  to  you,  or  furnishes  it  to  you  as  a carrier,  like  when 
you  speak  about  getting  cars  and  spending  $16  on  them  to  properly 
equip  them  why  it  would  not  be  just  as  possible  for  the  railroad 
company  to  furnish  you  with  a properly  equipped  car.  Do  they  use 
these  cars  for  something  else  after  you  spend  $16  on  them? 

Mr.  Hormel.  Yes.  That  car  may  be  used  to-morrow  for  our  beef 
shipped  to  Scranton.  It  gets  down  to  Scranton  with  our  meat,  and 
then  it  is  shipped  to  Albany  with  apples.  And  then  it  may  be  used 
out  of  Albany  on  a local  run.  And  finally  it  may  land  in  Florida  for 
fruit.  We  may  not  see  that  same  car  in  the  meat  business  again  for 
a year  or  two  years. 

Mr.  Tincher.  You  mean  that  it  is  impracticable  for  the  trans- 
portation companies  to  go  to  the  necessary  expense  to  furnish  refrig- 
erator cars,  so  that  the  packers,  independent  or  otherwise,  can 
operate  their  business  economically  and  conveniently  by  using  rail- 
road company  owned  cars  ? 

Mr.  Hormel.  For  the  beef  business,  yes;  not  in  the  case  of  pork. 
That  applies  only  to  beef. 

Mr.  Gernerd.  In  other  words,  you  would  think  the  railroad  com- 
panies ought  to  furnish  their  own  cars  exclusively  for  the  transporta- 
tion of  meats.  Is  that  what  you  have  in  mind  ? 

Mr.  Tincher.  I do  not  want  them  to  do  that  unless  it  is  practicable. 
Any  man  can  get  a private  car.  It  does  not  take  a millionaire  to 
rent  one. 

Mr.  Gernerd.  Right  in  line  with  what  Mr.  Tincher  said,  let  me 
say  that  I need  possibly  10  or  15  refrigerator  cars  every  winter, 
between  the  15th  of  January  and  the  15th  of  March,  for  shipping 
potatoes.  It  is  very  seldom  that  I will  get  a refrigerator  car  that  I 
do  not  have  to  spend  from  $10  to  $15  to  $20  to  put  that  refrigerator 
car  in  shape  to  ship  my  potatoes  to  Philadelphia.  That  is  because 
there  may  be  something  wrong  with  the  bottom  of  the  car.  I have 
to  put  in  a false  bottom,  or  I have  to  fix  something  overhead,  or  the 
sides  of  the  car  need  fixing  to  prevent  freezing.  I have  not  shipped 
a carload  of  potatoes  in  the  last  two  years  that  I did  not  have  to 
spend  a minimum  of  $10  on  it  to  get  that  car  in  shape  for  shipment. 
They  use  that  car  for  a dozen  different  things.  It  may  be  used  for 
beef  at  one  time,  or  pork  at  another  time,  or  whatever  may  be  needed, 
and  whenever  a man  gets  it  for  a particular  purpose  he  has  to  put  it 
in  proper  shape  for  shipping  that  product. 

Mr.  Hormel.  Not  only  that,  but  when  you  get  that  car  in  shape 
to  ship  your  potatoes  you  may  stick  an  oil  stove  in  the  car,  and  then 
when  it  finally  gets  up  to  Austin,  Minn.,  and  is  turned  over  to  us  we 
have  one  sweet  time  on  our  hands  putting  it  in  shape  for  the  trans- 
portation of  meats. 

Mr.  Jones.  If  the  companies  were  allowed  to  make  an  additional 
charge  for  the  use  of  refrigerator  cars,  couldn’t  they  afford  to  equip 
46985—21 22 


338 


MEAT  PACKER. 


them  properly  and  furnish  them  exclusively,  as  you  do  for  beef 
shipments  ? 

Mr.  Hormel.  Yes;  they  could.  And  I believe  they  could  do  it 
now,  the  way  it  is.  Except  I do  not  believe  that  the  Interstate 
Commerce  Commission  has  ever  considered  it  feasible  to  try  to  make 
that  change. 

Mr.  Tincher.  The  Interstate  Commerce  Commission  has  been  up 
against  the  proposition  that  the  most  of  the  cars  would  not  only  not 
hold  potatoes,  but  lots  of  them  would  not  hold  a 4-year-old  steer,  the 
way  they  were  turned  back  to  the  railroad  companies  by  the  Govern- 
ment. 

The  Chairman.  Do  you  pay  demurrage  on  cars  ? 

Mr.  Hormel.  I am  not  clear  on  that  proposition.  I know  we  do 
not  dare  let  our  cars  stand  around,  or  we  didn’t  during  the  car 
shortage. 

The  Chairman.  If  you  hire  them  I suppose  you  pay  so  much  a day. 

Mr.  Hormel.  Yes,  sir. 

The  Chairman.  But  if  you  are  furnished  cars  by  a transportation 
company  and  hold  them  three  days  what  happens  ? 

Mr.  Hormel.  I am  not  sure  about  that.  But  I am  under  the 
impression  that  during  the  car  shortage  there  was  a charge  made. 

Mr.  Creigh.  It  is  the  same  tariff  as  applies  to  any  other  shipper. 

The  Chairman.  What  is  the  situation  ? 

Mr.  Hormel.  I understand  that  the  law  put  all  cars  under  the 
jurisdiction  of  the  Interstate  Commerce  Commission  and  made  them 
all  subject  to  the  same  rules,  whether  owned  by  us  or  a railroad 
company.  The  only  preference  we  get  by  our  ownership  or  rental 
of  cars  is  that  we  get  our  cars  back. 

Mr.  Creigh.  That  is  right.  Under  the  railroad  tariffs  on  the  ques- 
tion of  demurrage  the  matter  of  ownership  cuts  no  figure. 

The  Chairman.  Do  you  have  to  pay  demurrage? 

Mr.  Creigh.  Yes,  sir;  the  Cudahy  Packing  Co.  does.  If  we  were 
to  ship  down  to  Philadelphia,  say,  and  if  we  were  to  leave  a car  on 
our  sidetrack  for  any  time,  for  the  extent  of  the  demurrage  limit,  we 
would  pay  a demurrage  thereon  the  same  as  if  it  were  a Pennsylvania 
Railroad  freight  car. 

The  Chairman.  You  speak  of  buying  hogs.  Do  you  buy  any 
cattle  at  the  South  St.  Paul  stockyards  ? 

Mr.  Hormel.  Yes,  sir.  Mr.  Wells  was  under  the  impression  that 
we  did  not,  but  we  do.  We  have  a buyer  on  the  South  St.  Paul 
market  at  intervals. 

The  Chairman.  You  have  had  no  more  trouble  buying  cattle  there 
than  hogs  ? 

Mr.  Hormel.  No,  sir. 

Mr.  Purnell.  I suppose  some  one  has  asked  you  this  question 
when  I was  out,  but  do  you  experience  any  unfair  competition  at 
South  St.  Paul  ? 

Mr.  Hormel.  No,  sir.  That  was  brought  out. 

Mr.  Purnell.  The  statement  was  made  by  the  State  inspector 
that  whenever  you  came  in  there  and  bought  the  market  price  went 
up.  I am  sorry  I was  not  here  when  you  touched  on  that,  as  you 
probably  did. 

Mr.  Hormel.  Yes;  that  was  covered. 

Mr.  Purnell.  Then,  I do  not  care  to  have  you  go  over  it  again. 


MEAT  PACKER. 


339 


Mr.  Kincheloe.  Would  you  pay  more  for  a refrigerator  car  than 
for  an  ordinary  car  for  the  hauling  of  freight  ? 

Mr.  Hormel.  We  pay  the  regular  rate  on  our  product  when  we 
ship  in  our  own  cars. 

Mr.  Kincheloe.  I am  asking  if,  when  you  get  a refrigerator  car 
from  a railroad  company,  it  is  customary  for  it  to  cost  you  more  per 
car  than  the  ordinary  freight  car,  or  than  the  ordinary  cattle  car,  for 
instance  ? 

Mr.  Hormel.  No,  sir;  we  pay  the  regular  freight  rate  that  prevails 
on  the  commodity  that  we  ship. 

Mr.  Kincheloe.  That  $16  you  spoke  about  putting  on  a car  in 
order  to  ship  beef.  You  stand  that  whole  expense  yourself,  do  you? 

Mr.  Hormel.  Yes,  sir.  I think  to  answer  your  question  I may 
cite  an  instance.  It  so  happened  that  I had  some  machinery  to  come 
down  from  St.  Paul  for  a breakdown  in  the  plant.  It  was  urgent. 
We  had  to  get  it  at  once.  There  was  a refrigerator  car  standing  on 
the  sidetrack  and  we  loaded  that  machinery  into  the  refrigerator  car 
and  sent  the  same  to  Austin  because  there  was  an  emergency— we 
would  not  have  done  it  otherwise — and  we  paid  no  more  freight  for 
it  than  if  it  had  been  shipped  in  an  ordinary  car. 

Mr.  Kincheloe.  You  said  that  when  you  shipped  beef  you  had  to 
fix  up  the  car  for  that  purpose  ? 

Mr.  Hormel.  Yes,  sir. 

Mr.  Kincheloe.  Do  you  stand  that  whole  loss? 

Mr.  Hormel.  Yes,  sir. 

Mr.  Purnell.  You  do  that  in  this  way,  3m  u add  it  to  the  cost  of 
your  product  ? 

Mr.  Hormel.  I am  sorry  to  say  that  we  do  not. 

Mr.  Purnell.  You  do  not  take  that  into  consideration  at  all? 

Mr.  Hormel.  It  goes  into  the  cost  of  producing  the  product,  but 
not  into  the  selling  price. 

Mr.  Purnell.  Whoever  eats  the  meat  pays  for  it  ? 

Mr.  Hormel.  No,  sir;  we  pay  for  it,  because  the  other  packers 
shipping  beef  have  all  provided  themselves  with  cars,  and  if  we  are 
careless  and  have  to  let  our  beef  cars  get  on  the  road  and  have  to 
use  other  cars  we  are  the  ones  that  suffer.  The  other  packer  is  selling 
at  the  same  old  rate  and  we  have  to  compete  with  him.  That  $16 
is  out  of  our  pocket. 

Mr.  Purnell.  Were  you  present  when  Mr.  Wells  testified? 

Mr.  Hormel.  Yes,  sir. 

Mr.  Purnell.  What  have  you  to  say  about  what  he  claimed  for 
the  improvements  made  in  the  South  St.  Paul  stockyards  in  the 
matter  of  buying  and  selling  and  the  condition  of  the  yards  them- 
selves ? 

Mr.  Hormel.  Well,  I simply  know  this,  that  there  is,  at  least  in 
some  quarters,  a better  feeling  on  the  part  of  the  farmers  because  of 
the  situation  there,  they  having  a little  more  confidence  in  it.  We 
are  not  directly  affected  by  that  change  and  I can  not  give  you  the 
details  on  it.  This  is  hearsay  that  I am  giving  you. 

Mr.  Purnell.  Do  you  think  the  fact  that  the  State  of  Minnesota 
took  those  steps  to  protect  shippers  has  reflected  upon  the  integrity 
of  the  packers  ? 

Mr.  Hormel.  No,  sir.  I maintain  that  if  it  considered  it  necessary 
to  do  that,  all  right.  And  on  the  same  line  if  it  is  considered  neces- 


340 


MEAT  PACKER. 


sary  for  the  Congress  to  pass  any  legislation  at  all  affecting  the  present 
situation  for  the  regulation  of  stockyards  there,  whatever  may  be 
considered  the  most  reasonable  method  is  the  proper  thing  to  do. 
I believe  that  is  quite  in  order. 

Mr.  Tincher.  But  you  will  notice  the  witness  says  he  is  a packer 
and  does  not  know  whether  the  stockyards  people  will  agree  to  that 
or  not. 

The  Chairman.  I asked  a question  along  that  line  because  Mr. 
Wells  referred  to  your  company  as  being  on  the  South  St.  Paul 
stockyards  and  I thought  you  were  familiar  with  the  advantages  or 
disadvantages  there.  Are  there  any  advantages  or  disadvantages  in 
the  regulations  in  effect  there?  You  say  the  farmers  feel  better 
satisfied  with  conditions  there  ? 

Mr.  Hormel.  I understand  that  they  do,  but  that  is  merely  hear- 
say with  me. 

The  Chairman.  Any  other  questions  ? Or  were  you  through  with 
your  statement,  Mr.  Hormel  ? 

Mr.  Hormel.  I would  like  to  bring  out  several  points  that  I do 
not  feel  satisfied  with  yet.  One  of  them  is  the  reason  why  I believe 
there  is  a good  deal  of  insinuation  in  the  fact  that  you  are  going  to 
regulate  the  packer  according  to  the  first  part  of  the  Haugen  bill  at 
least,  and  I would  like,  if  I may,  discuss  the  necessity  for  having  that 
part  of  the  bill  in  there,  to  say  something  on  that  score. 

The  Chairman.  Go  ahead. 

Mr.  Hormel.  I looked  up  the  Federal  Trade  Commission  act  and 
it  uses  these  words: 

Unfair  methods  of  competition  in  commerce  are  hereby  declared  unlawful. 

My  position  is  this,  that  any  act  which  would  be  sufficient  evidence 
to  warrant  action  by  the  Secretary  of  Agriculture  under  Mr.  Haugen’s 
bill,  or  by  the  Federal  Trade  Commission  under  Mr.  Anderson’s  bill, 
or  by  the  Federal  Livestock  Commission  under  Mr.  McLaughlin’s 
bill,  would  also  be  sufficient  evidence  to  precipitate  action  under 
the  Federal  Trade  Commission  act. 

We  have  always  felt  that  we  were  able  to  take  care  of  ourselves 
in  competition  with  the  other  packers.  As  far  as  that  competition 
is  concerned  we  think  we  can  take  care  of  ourselves,  whether  that 
competition  be  from  big  or  small  packer.  We  do  not  believe  it  is 
necessary  to  have  legislation  covering  that  part  of  the  matter.  And, 
further,  so  far  as  I can  gather  from  talking  to  the  other  small  packers, 
they  all  feel  the  same  way.  I can  not  see  who  is  going  to  be  helped 
by  the  first  part  of  the  bill  that  Mr.  Haugen  introduced,  unless  it  is 
the  small  packer.  Now,  then,  if  the  small  packer  does  not  feel  that 
he  needs  that  help,  what  is  the  necessity  for  having  such  legislation  ? 

Mr.  Clarke.  Don’t  you  think  under  Chairman  Haugen’s  bill,  and 
if  the  suggestions  of  the  Secretary  of  Agriculture  are  incorporated 
into  that  bill,  that  we  would  not  alone  be  satisfying  the  present  un- 
certain, and  we  will  say  intangible,  feeling  as  to  wrongs  that  have 
crept  into  the  packing  industry,  but  that  we  would  also  be  laying  the 
foundation  for  the  Government  to  have  adequate  figures  and  facts 
and  data  in  the  future  if  there  are  other  things  we  find  we  do  not  reach 
now  in  legislation  that  may  come  out  of  this  committee  but  that 
should  be  reached.  Are  not  we  laying  the  foundation  for  something 
that  will  be  of  benefit  in  future  legislation  ? All  of  you  gentlemen 


MEAT  PACKER. 


341 


representing  packers  and  stockyards  claim  that  the  reports  we  have 
here  are  inaccurate  in  a good  many  ways.  Won’t  the  effect  that  this 
legislation  itself  will  have,  and  the  regulation  that  will  go  along  with 
it,  be  the  laying  of  a foundation  not  alone  in  protecting  you  but  the 
people  themselves? 

Mr.  Hormel.  We  have  a Secretary  of  Commerce,  haven’t  we? 

Mr.  Clarke.  Certainly.  But  I am  asking  for  information. 

Mr.  Tincher.  Yes;  and  we  have  a real  Secretary  of  Commerce  at 
this  time. 

Mr.  Hormel.  I would  say  that  the  aim  you  wish  to  gain  there 
could  be  best  accomplished  by  putting  an  amendment  on  either  the 
Sherman  Antitrust  Act  or  the  Clayton  Antitrust  Act  or  the  Federal 
Trade  Commission  act,  on  one  of  those  three  acts,  authorizing  the 
Secretary  of  Commerce  to  go  in  and  sufficiently  investigate  any 
business  which  is  under  suspicion  of  following  bad  practices,  and  to 
whatever  extent  may  be  necessary  to  establish  the  facts  in  regard  to 
that  particular  matter. 

Mr.  Tincher.  Is  there  anything  significant  about  your  suggesting 
the  Secretary  of  Commerce  to  do  this  ? Do  you  know  who  he  is  ? 

Mr.  Hormel.  I have  not  the  slightest  idea  ? 

Mr.  Tincher.  Well,  if  you  do  not  like  the  Secretary  of  Agriculture 
we  might  take  the  Secretary  of  Commerce. 

Mr.  Hormel.  I mentioned  the  Secretary  of  Commerce  because  he 
has  jurisdiction  over  all  business.  I did  not  say  the  Secretary  of 
Agriculture  because  he  has  not  jurisdiction  over  all  business.  Would 
not  some  such  amendment  to  the  present  law  really  gain  the  end  you 
wish  to  gain  ? 

Mr.  Tincher.  Oh,  there  is  no  difference  between  amending  a law 
and  the  passing  of  a law. 

Mr.  Hormel.  Well,  let  us  report  out  of  this  committee  two  bills. 

Mr.  Tincher.  We  will  do  well  to  pass  one. 

Mr.  Hormel.  Let  us  first  pass  one  covering  the  stockyards  and  the 
practices  in  them  in  whatever  is  the  most  reasonable  and  proper  way. 
Then  if  we  feel  that  something  further  is  necessary  in  order  to  keep 
a man  honest,  let  us  report  out  a general  bill  affecting  every  man  and 
making  every  man  honest. 

Mr.  Tincher.  We  have  had  before  this  committee  Mr.  Hoover, 
who  is  the  Secretary  of  Commerce,  and  Mr.  Wallace,  who  is  the 
Secretary  of  Agriculture,  and  they  are  inclined  to  think  the  trade  is 
so  intertwined  that  probably  one  jurisdiction  would  be  less  trouble. 
Did  you  hear  the  Secretary  of  Agriculture  when  he  made  his  state- 
ment this  morning  ? 

Mr.  Hormel.  Yes,  sir;  but  I could  not  help  wondering,  while  he 
was  testifying,  if  he  would  like  some  regulation  of  the  printing 
industry. 

Mr.  Tincher.  I think  he  would  welcome  it. 

Mr.  Hormel.  He  did  not  suggest  any  such  bill. 

Mr.  Tincher.  And  no  such  matter  was  under  consideration. 

Mr.  Hormel.  I know  there  must  be  some  crooked  printer  some- 
where. 

Mr.  Tincher.  I think  the  Secretary  of  Agriculture  would  welcome 
a bill  to  correct  the  evils  in  the  printing  trade.  I am  sure  he  would 
welcome  legislation  if  he  thought  it  was  necessary  to  get  information 


342 


MEAT  PACKER. 


from  the  different  papers  to  find  out  what  the  packer  propoganda 
costs  a year. 

Mr.  Hormel.  I want  legislation  to  get  right  practices  in  the  packing 
industry,  but  I do  not  think  we  are  on  the  right  track.  I think  any 
legislation  should  be  more  general  in  scope  and  that  you  should  bring 
within  its  provisions  all  people  doing  business. 

Mr.  Tincher.  If  you  would  rather  have  Mr.  Hoover  than  Mr. 
Wallace,  then  all  right. 

Mr.  Clarke.  You  are  confusing  two  terms,  supervision  and  regu- 
lation. I think  the  Secretary  was  for  supervision  and  not  for  regu- 
lation. 

Mr.  Jones.  There  are  various  industries  that  are  now  under  Gov- 
ernment regulation,  such  as  the  railroads  and  banks  and  other  things 
that  have  become  important  enough  in  this  country  to  have  special 
regulation  with  reference  to  their  particular  line  of  industry.  It  is 
a question  whether  the  public  interest  and  need  is  such  as  to  require 
regulation  as  to  the  packing  industry.  That  is  all  we  need  to  con- 
sider. 

Mr.  Hormel.  Well,  I can  not  conceive  myself  that  it  will  be  pos- 
sible to  convict  the  packer  or  straighten  him  out  under  any  other 
legislation  if  you  can  not  get  any  action  under  the  legislation  that 
already  exists. 

Mr.  Tincher.  I am  afraid  you  do  not  consider  these  matters  care- 
fully enough  before  you  express  yourself.  Mr.  Hoover,  Secretary  of 
Commerce,  is  going  to  be  awfully  busy  in  his  line,  which  is  to  build 
up  trade  in  foreign  countries  that  will  afford  you  a market  place  for 
your  product.  Mr.  Wallace,  from  your  home  State,  is  going  to  run 
the  Department  of  Agriculture,  and  this  subject  is  related  to  agri- 
culture in  such  a way  that  if  wTe  are  going  to  have  regulation,  with 
all  due  respect  to  both  gentlemen,  who  have  great  ability,  I think 
Mr.  Wallace’s  department  would  be  the  place  to  put  you. 

Mr.  Hormel.  And  you  promise  that  by  giving  the  Secretary  of 
Agriculture,  if  he  is  the  one,  power  to  investigate  any  particular 
packing  business  at  such  time  as  it  is  under  suspicion,  that  that  will 
be  done  without  subjecting  us  to  this  general  suspicion? 

Mr.  Tincher.  That  is  all  he  is  going  to  do.  He  is  going  to  put  the 
packers  in  jail. 

Mr.  Hormel.  Is  he  going  to  put  somebody  else  in  charge  of  that, 
and  won’t  he  have  to  get  men  enough  for  this  supervision,  and  aren’t 
we  going  to  bear  the  expense  of  that,  of  getting  such  information  at 
times  when  it  is  not  necessary  ? 

Mr.  Tincher.  Who  bears  the  expense  now? 

Mr.  HormeR.  The  packer.  Every  time  anyone  comes  into  our 
accounting  department  to  get  information  I have  to  put  a clerk  at 
that  work  to  give  it.  Every  time  some  one  wants  a report,  I have 
to  have  it  made  out.  Every  time  some  one  wants  to  talk  to  me  I 
have  to  stop  and  talk  to  him. 

Mr.  Clarke.  You  have  your  clerk  already  employed. 

Mr.  Hormel.  Yes;  but  he  is  busy  at  something  else;  at  the 
business  for  which  he  is  employed.  We  would  not  have  him  if  he 
did  not  have  something  to  do,  and  when  he  has  to  stop  to  do  this 
something  has  to  be  sacrificed. 

Mr.  Gernerd.  Wouldn’t  the  matter  of  supervision  be  a very  small 
expense  ? 


MEAT  PACKER. 


343 


Mr.  Hormel.  No,  sir;  because  you  can  not  tell  how  far  it  will  go. 
Let  me  illustrate:  The  Department  of  Agriculture  has  started  to 
make  us  pay  for  all  time  of  Government  inspectors  over  eight  hours. 
Maybe  after  this  thing  goes  along  a little  while  we  will  be  paying  a 
part  of  the  salary  of  these  men. 

Mr.  Gernerd.  Do  you  mean  that  you  are  paying  a part  of  the 
salaries  of  the  men  employed  by  the  Government  ? 

Mr.  Hormel.  I mean  to  say  that  the  packers  are  paying  that 
portion  of  the  salaries  of  the  men  working  for  the  Department  of 
Agriculture  that  means  more  than  eight  hours  in  any  one  day.  I 
do  not  think  that  is  fair.  I do  not  think  the  legislation  ever  contem- 
plated that.  I doubt  if  the  framers  of  the  bill  intended  it,  but  that 
is  what  it  has  grown  to. 

Mr.  Creigh.  I am  just  wondering  about  the  situation  here,  Mr. 
Chairman.  I do  not  want  to  interrupt  this  proceeding,  nor  do  I 
wish  to  sidetrack  anything,  but  there  are  two  more  witnesses  here 


to  be  heard. 

The  Chairman.  If  you  will  go  on,  Mr.  Hormel,  we  will  soon  be 
through. 

Mr.  Gernerd.  Before  you  leave  that  subject,  Mr.  Hormel,  I want 
to  ask  you  what  do  you  do  with  your  by-products  ? 

Mr.  Hormel.  We  sell  them. 

Mr.  Gernerd.  You  sell  them? 

Mr.  Hormel.  Yes,  sir. 

Mr.  Gernerd.  Do  you  have  any  separate  companies  in  which  you 
own  the  controlling  stock  to  which  you  sell  those  by-products  ? 

Mr.  Hormel.  No,  sir. 

Mr.  Gernerd.  The  by-products  a year  ago  practically  took  care 
of  your  overhead,  didn’t  they?  Wasn’t  your  real  profit  made  in 
your  by-products  rather  than  in  the  actual  sale  of  meats  ? 

Mr.  Hormel.  Well,  we  do  not  differentiate  in  our  accounting  be- 
tween by-products  and  meats,  and  therefore  I can  not  answer  that 
question.  I do  not  know  just  what  we  do  get  for  our  by-products. 

Mr.  Gernerd.  Do  you  mean  to  say  that  in  your  cost  of  production, 
and  that  is  what  it  finally  comes  down  to,  you  do  not  know  what  the 
different  by-products  coming  from  a steer — say  hides,  horns,  and 
hoofs  and  fertilizing  material — amount  to  ? Do  you  mean  to  say  you 
do  not  know  what  relation  they  bear  to  the  general  overhead  ? 

Mr.  Hormel.  Yes;  I absolutely  mean  to  say  that. 

Mr.  Gernerd.  I am  asking  you  what  proportion  of  your  overhead 
does  that  take  care  of  ? 

Mr.  Hormel.  I say  absolutely  I do  not  know  that. 

Mr.  Gernerd.  You  do  not  know  that  ? 

Mr.  Hormel.  I do  not  believe  that  any  packer  can  answer  that 
in  regard  to  his  pork.  Can  you  answer  that  in  regard  to  your  pork, 
Mr.  Wilson  ? 

Mr.  Lightfoot.  On  that  point  I want  to  say  that  to-morrow  Mr. 
Wilson  expects  to  go  on  the  stand,  and  he  will  give  you  the  prices  for 
several  years  covering  the  values  of  all  by-products. 

Mr.  Gernerd.  That  is  just  what  I want.  I think  that  a very  ma- 
terial matter,  and  that  will  be  all  right.  This  may  have  a lot  to  do 
in  another  direction. 

Mr.  Kincheloe.  Here  is  a thing  that  is  a little  new  to  me.  Do  you 
mean  to  say  that  all  of  the  employees  of  the  Department  of  Agri- 


344 


MEAT  PACKER. 


culture,  in  addition  to  the  employees  in  the  Bureau  of  Animal  Indus- 
try who  work  over  eight  hours  at  any  of  your  plants  or  at  any  other 
plant  that  is  on  an  eight-hour  day,  are  paid  by  the  packers  ? 

Mr.  Hormel.  Yes,  sir;  and  at  the  rate  of  time  and  one-half. 

Mr.  Kincheloe.  Well,  is  that  a part  of  the  organic  law  creating 
those  offices,  or  do  you  know  ? 

Mr.  Hormel.  No,  sir. 

Mr.  Creigh.  It  is  in  one  of  your  appropriation  bills.  Of  course,  it 
is  not  paid  directly  to  the  inspector,  but  it  is  paid  through  the  regu- 
lation. 

Mr.  Hormel.  We  get  an  individual  bill. 

The  Chairman.  I believe  it  came  at  the  suggestion  of  the  packers. 

Mr.  Creigh.  The  packers  have  opposed  every  suggestion  on  the 
basis  of  paying  money  to  inspectors. 

The  Chairman.  That  was  when  we  had  this  matter  up  ? 

Mr.  Creigh.  No;  this  is  a recent  amendment. 

The  Chairman.  Wasn’t  there  a suggestion,  if  not  directly,  still 
practically  amounting  to  the  packers  paying  this  money?  About 
three  years  ago,  I think,  though  I am  not  sure  about  the  date,  it  was 
suggested  to  the  Committee  on  Agriculture  that  in  case  overtime  was 
required  the  packers  might  be  permitted  to  pay  for  it,  and  instead  of 
permitting  it  to  be  paid  direct  to  the  inspectors  it  should  be  paid  to 
the  Government. 

Mr.  Gernerd.  Wasn’t  that  a war-time  proposition? 

The  Chairman.  I think  it  was  during  the  war. 

Mr.  Kincheloe.  All  the  time  the  employees  from  the  Department 
of  Agriculture  work  in  packing  houses  or  yards  or  anywhere  else  over 
eight  hours  they  are  paid  time-and-a-half  for  overtime  by  these 
packers,  are  they? 

Mr.  Hormel.  Yes,  sir. 

The  Chairman.  That  occurs  only  in  rare  instances. 

Mr.  Kincheloe.  I mean  when  they  do  work  overtime.  How  came 
that  to  happen  ? 

The  Chairman.  I understood  it  came  through  a suggestion  from 
the  packers;  that  instead  of  the  packers  having  to  close  at  a certain 
hour  that  they  might  continue  on. 

Mr.  Ten  Eyck.  In  other  words,  what  we  would  have  done  they 
would  have  kept  the  factory  open  only  eight  hours,  but  for  the  con- 
venience of  the  packers,  if  they  worked  more  than  that,  they  were  to 
pay  the  overtime  for  the  inspectors. 

The  Chairman.  Or  we  would  have  to  have  an  extra  man  at  pos- 
sibly a salary  of  $2,000  or  $3,000  if  they  worked  more  than  that 
number  of  hours. 

Mr.  Hormel.  I take  it  the  committee  has  nothing  more  to  ask  me. 
I am  sorry  I have  appeared  so  dilatory  in  the  making  of  my  state- 
ment, but  with  the  questions  asked  and  interruptions  it  was  pretty 
hard  for  me  to  be  otherwise. 

In  conclusion  I want  to  say  that  there  are  just  such  little  things 
that  may  hurt  us,  things  that  we  can  not  conceive  of  now  and  can  not 
contemplate  now,  but  that  will  probably  hit  us  in  the  matter  of 
regulation.  I firmly  believe  that  any  law  you  may  pass  here,  other 
than  perhaps  the  regulation  of  stockyards,  if  that  is  necessary,  and  I 
do  not  know;  but  that  any  other  law  will  be  superfluous  and  will  not 
gain  the  end  which  you  wish  to  gain.  I believe  that  any  other  law 


MEAT  PACKER. 


345 


is  liable  to  do  harm  instead  of  good,  and  it  is  my  idea  that  there 
should  be  some  means  of  getting  fair  play  among  the  packers,  cer- 
tainly under  the  present  statutes,  and  we  as  one  small  packer  feel 
assured  we  can  get  fair  play  by  virtue  of  the  laws  already  existing; 
otherwise  we  would  not  be  here  protesting.  We  would  want  to  save 
our  lives  and  our  business  and  would  be  here  favoring  action  if  we 
thought  it  was  necessary. 

Mr.  Clarke.  You  heard  the  statement  of  the  Secretary  of  Agri- 
culture ? 

Mr.  Hormel.  I did  not  hear  the  first  of  it. 

Mr.  Clarke.  From  his  statement  you  would  be  willing  for  the 
Government  to  have  supervision  in  the  spirit  he  mentioned,  wouldn’t 
you  ? 

Mr.  Hormel.  Yes,  sir;  if  I could  be  sure  of  its  being  in  that  spirit. 
But  men  will  change  and  committees  will  change. 

Mr.  Clarke.  Why  couldn’t  you  meet  the  Government  in  the  same 
spirit  we  are  trying  to  meet  you  ? 

Mr.  Hormel.  The  Government  is  meeting  us  in  the  spirit  that  it 
has  got  to  watch  us. 

The  Chairman.  Do  you  consider  it  a hardship  to  occasionally  pay 
a small  amount  for  overtime  ? 

Mr.  Hormel.  It  is  a small  drain  on  us. 

The  Chairman.  How  much  expense  is  it  to  you  or  to  the  average 
packer  ? 

Mr.  Hormel.  Well,  I can  not  give  you  the  exact  figures.  There 
was  a time  when  it  first  went  into  effect  and  we  were  operating  10 
hours  a day  every  day  that  it  meant  we  had  to  pay  three  hours  over- 
time every  day.  It  was  on  that  basis. 

The  Chairman.  How  long  ago  was  that? 

Mr.  Hormel.  A year  ago.  That  meant  that  every  day  we  had  to 
pay  three  hours’  overtime  to  every  one  of  the  16  inspectors  in  our 
plant. 

The  Chairman.  Are  you  running  10  hours  a day  right  along? 

Mr.  Hormel.  We  were  that  winter,  when  this  thing  came  along. 

The  Chairman.  You  were  entitled  to  an  additional  inspector. 
The  representations  made  to  the  committee  were  that  occasionally 
a packer  would  desire  to  run  an  hour  or  two  overtime,  and  he  could 
not  run  without  an  inspector,  and  for  that  reason  the  packers  pre- 
ferred to  have  the  privilege  of  paying  for  that  hour  or  two,  whatever 
it  was,  so  as  to  save  the  Government  the  expense  of  furnishing  them 
with  an  additional  inspector  for  that  little  time. 

Mr.  Kincheloe.  Was  that  through  mutual  agreement  with  the 
packers,  that  if  they  ran  over  eight  hours  a day  they  should  pay  the 
extra  time? 

The  Chairman.  I understood  it  came  as  a suggestion  from  the 
packers. 

Mr.  Creigh.  Let  me  suggest  that  Mr.  Wilson  is  here,  and  that  is 
rather  a practical  matter,  and  I only  know  from  hearsay,  and  that  he 
could  well  explain  it  to  you. 

Mr.  Wilson.  Mr.  Chairman,  I do  not  think  it  was  by  arrangement 
with  the  packers.  I think  it  is  only  fair  to  state  that  probably  in  one 
instance  one  packer  said  rather  than  not  operate  overtime,  and  if  he 
could  not  operate  any  other  way,  he  would  pay  that  additional  charge 


346 


MEAT  PACKER. 


himself.  I know  that  it  was  never  submitted  to  the  packers  as  a 
body. 

The  Chairman.  But  as  it  was  stated  around  the  table,  that  is  the 
understanding  I had  at  the  time,  and  I think  others  had  the  same 
understanding,  that  the  suggestion  came  from  the  packers. 

Mr.  Wilson.  It  may  have  been  so  stated,  and  if  it  was  so  stated  it 
must  have  referred  to  the  case  of  one  Chicago  packer,  one  of  the 
smaller  packers.  He  had  the  question  up,  and  was  very  much  put 
out  to  think  the  Government  would  not  permit  those  inspectors  to 
continue  over  the  eight  hours  without  his  paying  the  extra  charge. 
It  was  during  the  war  period,  and  he  concluded  he  would  rather  pay 
it  than  to  shut  down  those  extra  hours.  But  it  is  not  a matter  that 
has  been  submitted  to  the  packers  generally. 

The  Chairman.  Do  not  understand  me  to  say  that  it  was  sub- 
mitted, but  it  was  the  talk  around  the  table. 

Mr.  Wilson.  On  the  part  of  your  committee. 

The  Chairman.  That  it  would  be  an  accommodation,  and  that 
they  would  gladly  pay  that  additional  charge. 

Mr.  Wilson.  I think  that  statement  might  fairly  have  been  made 
on  the  strength  of  that  one  packer. 

The  Chairman.  To  what  extent  is  it  carried  on  ? 

Mr.  Wilson.  I do  not  think  it  is  an  important  item  now,  but  I can 
see  where  it  might  develop  into  a right  serious  matter  to  the  packer. 

The  Chairman.  During  the  war  a number  of  things  had  to  be  done. 

Mr.  Wilson.  But  even  now  there  are  a number  of  packers  who 
have  set  their  time  on  the  10-hour  basis,  even  though  they  are  not 
working  over  8 hours.  And  some  of  the  labor  people  are  indicating 
that  they  would  like  to  have  more  work  than  eight  hours.  Of  course 
you  know  where  that  proposition  stands. 

The  Chairman.  In  normal  times  what  would  it  amount  to  ? Do 
you  generally  run  over  8 hours  ? 

Mr.  Wilson.  Well,  very  frequently  there  are  times  when  a packer 
must  run  over  8 hours.  If  we  could  control  the  receipt  of  livestock 
and  regulate  that  matter  it  would  not  often  be  necessary  to  run  over 
8 hours.  But  when  cattle  come  in  as  you  know  they  do,  one  day 
30,000  or  40,000  and  the  next  day  10,000,  and  maybe  the  next  day 
a fewer  number,  we  have  to  handle  the  stuff  when  it  comes  in.  We 
can  not  hold  those  cattle  and  block  the  yards  and  suffer  the  shrinkage. 
We  must  run  overtime  when  those  times  come,  even  if  we  have  to 
pay  double  or  treble  time.  We  have  to  dispose  of  that  stock.  We 
must  be  in  shape  to  run  the  yards  the  next  day.  We  can  not  say: 
We  will  carry  these  over  till  Friday,  not  if  they  come  in  on  Wednes- 
day. That  is  a business  that  can  not  be  handled  in  that  way. 

The  Chairman.  Is  it  of  enough  importance  to  change  the  law  ? 

Mr.  Wilson.  I do  not  understand  that  it  would  require  any 
change  in  the  law.  It  might  require  a change  in  the  ruling  of  the 
department. 

Mr.  Tincher.  How  many  hours  a day  do  those  inspectors  really 
work? 

Mr.  Gernerd.  Yes,  if  they  are  not  continuously  at  work  is  there 
any  reason  why  they  could  not  put  in  that  time.  We  do  not  want  to 
work  any  hardship  on  anybody,  but  we  here  in  Congress  have  to 
work  12  and  15  hours  a day  in  order  to  do  the  work  that  the  people 
require  of  us,  and  while  we  want  to  be  absolutely  fair  to  everybody 


MEAT  PACKER. 


347 


there  is  no  reason  why  the  public  service  should  suffer  because  of  the 
need  of  a little  overtime  now  and  then. 

Mr.  Wilson.  Well,  gentlemen,  I personally  have  a great  deal  of 
respect  for  these  inspectors  and  for  their  work.  I think  they  are 
generally  misunderstood.  They  have  pretty  hard  work,  and  I have 
a great  deal  of  respect  for  them  in  the  conduct  of  the  work. 

Mr.  Tincher.  Isn’t  there  a distinction  between  working  and  being 
on  duty.  As  a matter  of  fact,  many  times  a day  for  a goodly  portion 
of  the  time  they  are  not  busy,  are  they  ? 

Mr.  Wilson.  I would  not  say  that.  When  the  plants  are  busy 
they  are  busy,  and  they  have  a big  responsibility.  These  men  are 
throughout  the  plant,  in  every  department,  and  they  are  using 
knives  in  making  inspections.  They  are  real  working  men.  Their 
work  is  not  only  laborious  but  there  is  a responsibility  attached  to 
their  work. 

Mr.  Tincher.  But  the  principle  of  letting  the  packers  pay  them  a 
part  of  their  earnings  is  wrong. 

Mr.  Wilson.  I think  so,  too. 

Mr.  Ten  Eyck.  I do  not  think  any  particular  industry  supervised 
or  inspected  should  pay  a part  of  that  cost. 

Mr.  Wilson.  I agree  with  you.  But  at  the  present  time  I do  not 
think  it  is  an  extreme  burden. 

Mr.  Tincher.  But  the  principle  is  wrong? 

Mr.  Wilson.  Yes,  sir. 

Mr.  Ten  Eyck.  If  a packing  house  wants  to  work  10  or  15  hours 
a day  and  the  Government  wants  to  let  them  do  it  the  Government 
should  have  inspectors  on  duty  there. 

Mr.  Kincheloe.  Is  your  minimum  day  8 hours? 

Mr.  Wilson.  Yes,  sir;  it  is  now. 

Mr.  Kincheloe.  You  say  you  frequently  run  over  that  because 
of  congested  conditions  ? 

Mr.  Wilson.  Yes,  sir;  and  we  pay  overtime  beyond  that. 

Mr.  Kincheloe.  And  you  have  been  paying  the  Government 
inspectors  time  and  a half  for  any  time  they  put  in  in  excess  of 
8 hours? 

Mr.  Wilson.  Yes,  sir. 

Mr.  Creigh.  And  of  course  he  has  to  pay  overtime  in  the  same 
way  to  his  own  employees. 

Mr.  Kincheloe.  Well,  that  does  not  concern  us. 

Mr.  Wilson.  Certainly  not.  But  we  pay  them  for  everything 
over  8 hours. 

Mr.  Kincheloe.  I do  not  think  that  is  right. 

Mr.  Wilson.  Nor  do  I. 

Mr.  Voigt.  Mr.  Hormel,  it  appears  in  the  evidence  that  you  gave 
before  this  committee  in  the  last  hearing  last  year,  beginning  at  the 
bottom  of  page  988,  that  there  was  a letter  which  was  copied  from 
page  2096,  part  5,  of  the  hearings  before  the  Interstate  Commerce 
Committee,  that  at  one  time  had  packer  legislation  under  considera- 
tion. In  those  hearings  was  found  a copy  of  a letter  written  by  a 
representative  of  Sulzbergers  Sons  Co.,  the  latter  company  being 
succeeded  by  Wilson  & Co.  That  letter  was  written  to  a representa- 
tive of  theirs  at  Albert  Lea. 

Mr.  Hormel.  Yes,  sir. 

Mr.  Voigt.  That  is  a packing  plant  that  competes  with  you  ? 


348 


MEAT  PACKER. 


Mr.  Hormel.  Yes,  sir. 

Mr.  Voigt.  This  is  what  that  man  said: 

Believe  that  the  coming  week,  when  we  will  endeavor  to  buy  up  close  to  the  maxi- 
mum capacity,  will  demonstrate  the  question  as  to  the  possibility  of  getting  & sufficient 
supply  of  hogs  without  we  becoming  more  aggressive.  Unless  it  is  demonstrated  by 
this  and  next  week’s  prices  that  we  can  continue  to  get  the  proper  volume  of  hogs 
in  the  face  of  this  competition,  we  will  recommend  that  we  place  a buyer  in  strictly 
Austin  territory,  having  this  buyer  ship  the  hogs  purchased  direct  to  Chicago  or  some 
of  our  other  plants.  In  order  to  do  this  it  will  be  necessary  for  some  one  to  go  on  the 
ground  and  study  carefully  the  territory  where  this  could  be  worked  out  to  advantage. 

That  shows  that  the  predecessors  of  Wilson  & Co.  were  willing  to 
go  right  into  your  territory  and  bid  up  higher  prices  in  order  to  get 
hogs  away  from  you,  does  it  not  ? 

Mr.  Hormel.  It  would  indicate  to  me  that  we  had  them  worried 
in  that  particular  district.  I think  this  was  all  covered  in  the  testi- 
mony last  year,  and  I think  that  testimony  has  been  made  a part  of 
these  proceedings  on  motion  of  your  chairman. 

Mr.  Voigt.  Well,  you  need  not  bother  about  that;  just  answer  the 
question.  I am  calling  attention  to  a specific  letter  here.  It  shows 
that  one  of  the  Big  Five  packers  was  willing  to  adopt  an  aggressive 
policy  in  your  district,  does  it  not?  That  is  what  they  say. 

Mr.  Hormel.  Surely. 

Mr.  Voigt.  The  thing  that  strikes  me  about  that  letter  is  this: 
That  while  they  were  willing  to  adopt  an  aggressive  policy  toward 
you,  yet  there  is  nothing  in  any  hearing  which  discloses  that  any  of 
the  big  packers  was  willing  to  adopt  the  same  sort  of  policy  toward 
any  of  the  other  four.  Have  you  ever  seen  any  statement  where  one 
of  the  Big  Five  packers  adopted  that  sort  of  policy  toward  the  other 
four? 

Mr.  Hormel.  May  I answer  that  indirectly?  I will  tell  you  why 
I want  to  answer  it  indirectly.  The  matter  of  the  50-50  agreements 
and  all  that  sort  of  thing  has  been  brought  up.  There  may  have 
been  such  a thing,  but  we  never  happened  to  enter  into  one  if  there 
was.  But  this  fact  remains,  that  Wilson  & Co.  invested,  at  Albert 
Lea,  their  money  in  a plant,  and  for  their  investment  to  be  made  a 
paying  proposition  they  must  kill  so  many  hogs  continuously.  We 
have  an  investment  in  a plant  at  Austin,  and  in  order  to  meet  the 
expenses  of  that  investment  we  must  kill  so  many  hogs.  We  have 
never  had  any  understanding  with  Wilson  & Co.,  and  yet  we  know 
they  are  going  to  kill  enough  to  meet  their  overhead,  and  in  the 
same  way  Wilson  & Co.  know  we  are  going  to  kill  enough  to  meet 
our  overhead.  If  there  are  not  enough  hogs  in  that  community  to 
meet  that  overhead,  and  if  we  go  out  and  buy  hogs  so  that  he  can 
not  get  them,  he  is  going  to  get  awfully  busy  to  try  to  get  those  hogs 
back.  Otherwise  he  will  be  forced  out  of  Albert  Lea. 

Now,  then,  gentlemen  of  the  committee,  what  is  the  effect  of  that 
effort  ? This  thing,  to  my  mind,  puts  itself  in  the  condition  where 
we  do  prorate  the  stock  between  us  in  this  way,  that  we  each  go 
after  what  we  want,  what  we  must  have,  hard  enough  to  get  it, 
however  hard  that  may  be. 

Mr.  Voigt.  I understand  that  there  is  a good  deal  of  competition 
between  you  and  Wilson  & Co.  in  your  territory  ? 

Mr.  Hormel.  Yes,  sir. 

Mr.  Voigt.  Undoubtedly  that  tends  to  bring  out  a fair  price  for 
the  product  that  you  buy.  But  the  point  I would  like  to  know 


MEAT  PACKER. 


349 


about  from  you  is  whether  you  know  of  any  other  instance  where 
one  of  the  Big  Five  packers  pursued  the  same  aggressive  policy  in 
getting  what  they  considered  their  supply  of  hogs  toward  each  other 
that  in  this  letter  it  is  mentioned  they  were  going  to  assume  toward 
you  ? 

Mr.  Hormel.  No,  sir,  I do  not.  And,  furthermore,  I know  that 
Wilson  & Co.  have  found  out  that  it  is  not  a profitable  business  to 
pursue  that  same  policy  toward  us  now.  I do  not  know  what  idea 
they  had  then,  but  now  they  have  come  to  the  conclusion  that  it  is 
a lot  cheaper  to  go  to  Sioux  City  or  St.  Paul  or  some  other  part  of 
the  country  and  buy  hogs  than  to  come  to  Austin  and  pay  25  cents 
or  30  cents  or  40  cents  more  to  get  them  there. 

Mr.  Voigt.  You  say  they  have  a plant  at  Albert  Lea,  and,  of  course, 
they  need  a certain  number  of  animals  to  keep  that  plant  fairly  well 
supplied  ? 

Mr.  Hormel.  Yes,  sir. 

Mr.  Voigt.  You  were  probably  here  when  that  letter  was  read  re- 
specting Denver,  the  one  from  one  Armour  to  another  Armour  ? 

Mr.  Hormel.  Yes,  sir. 

Mr.  Voigt.  It  appeared  in  that  letter  that  at  Denver  the  Swift 
plant  was  considerably  larger  and  better  equipped  than  the  Armour 
plant,  and  still  they  were  dividing  up  50-50  in  quantity.  Evidently 
in  that  case  the  Swift  plant  was  not  operating  to  capacity. 

Mr.  Hormel.  Well,  of  course,  I do  not  know  whether  the  actual 
records  would  prove  that  they  did  divide  the  hogs  50  per  cent  to 
each  plant  or  not.  I do  know  this,  that  if  Armour  & Co.  were  able 
to  kill  only  so  many  hogs  because  of  having  an  old  plant  at  the  town, 
and  Swift  & Co.  came  along  and  built  a new  plant,  that  just  because 
Swift’s  plant  was  bigger  I do  not  believe  that  Armour  would  concede 
to  them:  Now,  you  have  a bigger  plant,  we  will  let  you  kill  the  most 
hogs.  I think  the  plan  would  be  that  Armour  would  still  go  after 
the  same  number  of  hogs,  and  if  he  did  I think  Swift  would  have  a 
pretty  hard  time  getting  him  to  reduce  the  number.  I think  the 
the  percentage  would  be  pretty  liable  to  remain  half  and  half,  so  that 
really  each  of  them  would  be  getting  about  one-half  of  the  receipts, 
whether  they  had  any  real  agreement  or  not.  I think  it  would  con- 
tinue to  be  on  a 50-50  basis  if  that  is  the  way  it  happened  to  be. 

Mr.  Voigt.  Suppose  you  had  the  only  plant  in  a certain  locality, 
and  another  man  came  into  that  locality  and  put  up  a plant  twice 
as  large  as  yours,  having  twice  the  capacity  of  yours.  Do  you  sup- 
pose that  under  those  conditions  you  would  be  able  to  continue  to 
take  100  per  cent  of  the  hogs  raised  in  that  locality,  if  you  had  been 
doing  it  before  ? 

Mr.  Hormel.  No,  sir;  on  the  other  hand,  it  would  be  impossible 
for  him  to  come  in  there  and  get  away  from  us  enough  hogs  to  fully 
operate  his  plant,  because  the  minute  he  started  taking  the  hogs  we 
had  to  have  to  keep  our  plant  going,  to  keep  up  our  kill,  we  would 
start  bidding  up  on  those  hogs  and  would  make  the  business  unpro  t- 
able  to  him  as  well  as  to  ourselves,  and  he  would  have  to  change  his 
tactics. 

Mr.  Voigt.  Would  it  necessarily  follow  that  because  two  men  have 
two  plants  at  a given  point  they  must  divide  up  the  receipts  fifty- 
fifty? 


350 


MEAT  PACKER. 


Mr.  Hormel.  No;  but  it  is  not  possible  that  one  will  concede  to 
the  other.  If  there  are  enough  hogs  coming  into  Denver  to  kill  only 
100,000  for  a given  period  of  time,  then  each  one  will  fight  to  secure 
as  large  a proportion  of  those  100,000  as  it  is  necessary  for  him  to 
have,  and  if  it  has  been  on  a practically  fifty-fifty  basis  it  will  likely 
continue  on  that  basis.  They  will  find  that  they  can  not  get  hogs 
away  from  the  other  fellow.  If  they  try  to  do  that,  they  will  simply 
bid  the  hogs  up  to  a point  where  they  will  attract  hogs  up  to  the 
Denver  market,  but  not  attract  hogs  away  from  other  markets, 
because  if  they  did  they  could  not  compete  with  packing  houses  buy- 
ing in  other  markets  and  would  soon  go  out  of  business. 

Mr.  Voigt.  Your  theory  seems  to  be  that  if  two  men  are  located 
at  a given  point  and  are  buying  a given  commodity  that  there  is  a 
sort  of  economic  law  that  would  make  them  equal  ? 

Mr.  Hormel.  I do  not  think  it  is  an  economic  law.  I think  it  is 
the  law  of  human  nature,  the  natural  aggressiveness  on  the  part  of 
each  one. 

Mr.  Voight.  That  is  all. 

The  Chairman.  We  are  very  grateful  to  you. 

Mr.  Hormel.  And  I wish  to  thank  you,  gentlemen,  for  your 
patient  hearing. 

Mr.  Creigh.  Mr.  Rogers,  of  the  South  St.  Paul  Livestock  Exchange, 
is  here.  Mr.. Tincher,  will  you  be  good  enough  to  ask  him  about  that 
commission  man’s  letter  ? 

Mr.  Tincher.  I will. 

STATEMENT  OF  MR.  N.  P.  ROGERS,  PRESIDENT  OF  THE 

SOUTH  ST.  PAUL  LIVESTOCK  EXCHANGE,  ST.  PAUL, 

MINN. 

Mr.  Rogers.  I might  say  that  I am  the  president  of  the  South  St. 
Paul  Livestock  Exchange,  at  St.  Paul,  Minn.,  and  am  also  in  the 
live-stock  commission  business. 

I came  down  here  on  a wire  from  Mr.  Brown,  who  said  that  the 
South  St.  Paul  Livestock  Exchange  was  being  assailed  and  that  he 
thought  somebody  ought  to  come  down  and  answer  the  aspersions 
that  have  been  cast  on  the  exchange  in  that  market.  So  I came, 
not  knowing  even  who  the  man  was  that  was  doing  that  work. 
After  I got  here  I found  that  it  was  Mr.  R.  J.  Wells,  who  is  the  super- 
visor at  the  South  St.  Paul  stockyards.  I have  just  barely  had  time 
to  read  over  his  statements  made  before  your  honorable  committee. 

Mr.  Tincher.  Why,  I think  Mr.  Wells  brags  on  your  exchange. 
He  said  it  was  the  best  stockyards  in  the  world  and  that  if  we  passed 
any  law  he  wanted  us  to  exclude  that  exchange  from  the  operations 
of  the  law. 

Mr.  Rogers.  Mr.  Wells  is  a pretty  smooth  politician,  and  he  is 
trying  to  put  our  exchange  out  of  business  and  has  been  doing  so 
ever  since  he  has  been  there,  although  when  he  came  there  we  told 
him  that  we  would  cooperate  with  him  fully  in  every  respect  and 
afford  him  every  assistance  to  clean  up  any  work  that  was  wrong  or 
any  evil  practices  in  the  yards. 

We  had  a committee  to  sit  down  with  him,  and  he  adopted  the 
rules  of  our  exchange  pretty  nearly  word  for  word.  I am  going  to 


MEAT  PACKER. 


351 


leave  with  you  gentlemen  a copy  of  his  regulations  and  also  a copy 
of  our  exchange  rules. 

Mr.  Tincher.  Did  you  understand  that  Mr.  Wells  attacked  the 
South  St.  Paul  Exchange  ? 

Mr.  Brown.  I understand  so;  yes,  sir.  From  the  dispatches  I had. 

Mr.  J.  S.  Boyd,  secretary  National  Livestock  Exchange.  I sent  the 
wire. 

Mr.  McLaughlin  of  Nebraska.  Why  did  you  send  such  a wire? 

Mr.  Boyd.  Because  the  testimony  showed  Mr.  Wells  had  issued  an 
order  arbitrarily  to  the  exchange  at  South  St.  Paul  to  reduce  the 
commission  charges  to  $2  a car,  and  that  the  matter  was  now  a 
matter  of  litigation.  And  he  said  that  under  his  supervision  condi- 
tions had  been  improved.  I wondered  about  it,  and  for  that  reason 
I requested  Mr.  Brown  ask  this  gentleman  to  come  here  and  state 
what  the  situation  is. 

Mr.  Kincheloe.  You  say  Mr.  Wells  has  been  trying  to  put  that 
exchange  out  of  business.  If  that  exchange  went  out  of  business, 
wouldn’t  Mr.  Wells  lose  his  job,  too  ? 

Mr.  Rogers.  No,  sir. 

Mr.  Kincheloe.  Have  you  commission  men  a board  of  trade  or 
exchange  ? 

Mr.  Rogers.  Yes,  sir. 

Mr.  Kincheloe.  Why  would  he  want  to  put  that  exchange  out  of 
business  ? 

Mr.  Rogers.  He  is  trying  through  laws  he  is  getting  passed  through 
the  legislature  to  assume  some  jurisdiction  and  supervision  over  the 
dealers  at  the  yard,  and  also  over  the  stockyards  as  far  as  our  exchange 
is  concerned,  which  is  the  same  thing. 

You  gentlemen,  I think,  all  understand  what  a live-stock  exchange 
is.  We  think  we  have  one  of  the  most  up-to-date  live-stock  exchanges 
of  any  of  the  27  markets  in  the  country.  We  have  adopted  rules 
there  that  some  other  exchanges  have  not  adopted.  We  have  full 
rules  that  work  for  the  benefit  of  the  producer  of  live  stock.  We 
commission  men  know  that  without  the  producers  of  live  stock  we 
would  be  out  of  business,  and  we  feel  that  our  interests  are  the  pro- 
ducers’ and  shippers’  interests.  And  we  are  fighting  their  battles 
all  the  time,  and  have  been  doing  so  ever  since  we  organized  the 
exchange,  and  even  before — the  commission  men  were  fighting  the 
battles  of  the  producers  of  live  stock. 

As  I said,  we  wanted  to  cooperate  with  Mr.  WYlls  in  every  way 
possible,  except  we  told  him  when  he  started  this  work  of  supervision 
that  we  would  be  glad  to  cooperate  in  every  way  possible,  and  would 
obey  all  of  his  rules  and  regulations,  other  than  reserving  the  right 
to  fix  our  own  commission  charges  for  the  handling  of  live  stock. 
On  that  score  we  went  into  the  courts  with  him  and  the  matter  is 
now  in  the  Supreme  Court.  It  started  in  the  district  court,  where 
we  won  the  first  round,  and  it  has  now  been  argued  before  the  State 
Supreme  Court  of  Minnesota  and  we  will  probably  get  a decision  in  a 
few  weeks. 

Mr.  Jones.  That  seems  to  me,  in  substance  at  least,  just  about 
what  he  said  here. 

Mr.  Rogers.  Yes;  he  said  that  part  of  it.  I have  read  his  state- 
ment from  beginning  to  end,  and  Mr.  Wells  has  evidently  got  his 
wires  crossed  on  a good  many  things. 


352 


MEAT  PACKER. 


Mr.  Purnell.  State  wherein  he  has  misrepresented  the  situation 
at  South  St.  Paul  ? 

Mr.  Rogers.  Well,  in  the  first  place,  he  talks  about  hog  troughs. 
In  order  to  understand  that  I will  have  to  go  through  a short  history. 
Hog  troughs  were  put  in  originally  about  seven  or  eight  years  ago 
by  one  commission  man  putting  them  into  his  own  pen,  and  in  that 
way  he  thought  he  had  a little  advantage  over  his  competitors  in 
the  business.  It  went  along  until  all  of  the  commission  men  soon 
had  hog  troughs  in  their  pens.  This  was  before  Mr.  Wells  came 
there  by  five  or  six  years.  Then  the  number  of  commission  men 
began  to  increase.  The  stockyards  company  used  to  make  these 
troughs  and  put  them  in  the  pens  for  us.  They  were  increasing  so 
fast  that  the  stockyards  company  conceived  the  idea  that  they  would 
take  these  troughs  out  of  the  pens  and  let  the  boys  feed  the  hogs 
on  the  bare  floor.  0 

I ought  to  explain  that  the  floors  are  brick  and  just  as  soon  as  the 
hogs  are  out  each  day  they  are  washed  up  and  are  perfectly  clean 
every  morning.  Of  course,  after  three  or  four  loads  of  hogs  have  been 
put  in  there  they  may  get  a little  muddy,  and  a little  corn  may  be 
wasted.  Mr.  Wells  represented  to  you  gentlemen  that  his  super- 
vision caused  the  troughs  to  be  put  back.  When  they  were  taken 
out  of  there  the  live-stock  exchange  at  South  St.  Paul  protested 
violently  against  it,  because  we  thought  it  pleased  our  shippers  and 
we  wanted  to  keep  them  there. 

Mr.  Williams.  Who  took  them  out? 

Mr.  Rogers.  The  stockyards  company.  They  were  taken  out 
and  were  out  for  a while,  and  then  some  years  ago  the  Minnesota 
Live  Stock  Shippers’  Association  had  a bill  passed  through  the  legis- 
lature, before  Mr.  Wells  ever  thought  of  being  supervisor,  for  the 
troughs  to  be  put  back.  I think  they  were  put  back  before  Mr. 
Wells  came  there.  Anyhow  the  law  was  passed  before  he  came  there. 
That  law  was  passed  at  the  same  time  that  they  passed  a law  putting 
us  under  supervision. 

Mr.  Tin cher.  Who  came  there  as  supervisor? 

Mr.  Rogers.  Mr.  Wells. 

Mr.  Tincher.  It  was  a good  idea  to  have  hog  troughs.  You  were 
for  them  ? 

Mr.  Rogers.  Our  exchange  thought  the  troughs  were  all  right,  and 
we  wanted  to  keep  them. 

Mr.  Purnell.  I do  not  see  how  that  can  have  any  bearing  upon 
the  merits  of  any  one  of  these  three  bills.  I think  we  are  wasting 
time  on  a discussion  that  might  well  be  laid  aside. 

Mr.  Rogers.  I think  the  whole  thing  that  Mr.  Wells  said  is  entirely 
irrelevant  to  any  of  these  bills. 

Mr.  Purnell.  And  it  would  be  just  as  irrelevant  for  you  to  take 
the  matter  up. 

Mr.  Tincher.  Do  you  know  J.  E.  Decker  & Son? 

Mr.  Rogers.  No,  sir. 

Mr.  Tincher.  They  are  independent  packers. 

Mr.  Rogers.  Of  Mason  City? 

Mr.  Tincher.  I think  so. 

Mr.  Rogers.  Decker  Bros.,  I thought  it  was.  I have  heard  of 
them;  yes,  sir. 


MEAT  PACKER. 


353 


Mr.  Tincher.  They  say  they  have  had  trouble  buying  in  your 
yards  because  your  commission  companies  will  not  price  them  any- 
thing until  Swift  & Co.  have  had  a chance  to  bid  on  it. 

Mr.  Rogers.  How  old  is  that  letter? 

Mr.  Tincher.  I do  not  know.  This  is  a report  filed  June  28,  1919. 
It  is  rather  an  up-to-date  report.  Did  they  have  a condition  like  that 
there,  and  yet  you  have  never  heard  of  it  ? 

Mr.  Rogers.  I think  possibly  before  Armour  came  there  maybe 
some  of  Swift’s  buyers  might  have  tried  to  bulldoze  some  commission 
man,  like  buyers  do  in  many  yards.  But  I have  never  seen  the  time 
when  anybody  could  not  come  in  there  and  buy  stock  if  they  would 
bid  up  on  it. 

Mr.  Tincher.  Do  you  know  Reuben  A.  Rath,  an  independent 
packer  in  an  Iowa  town  ? 

Mr.  Rogers.  No,  sir. 

Mr.  Tincher.  He  says  he  gave  up  trying  to  trade  at  the  South 
St.  Paul  yards  because  the  commission  companies  would  not  let 
him  buy  anything  unless  he  would  pay  at  least  25  cents  more  than 
Swift  & Co. 

Mr.  Rogers.  I do  not  think  you  could  have  that  condition  there, 
because  the  commission  man  is  out  to  get  all  he  can  for  the  stock, 
and  will  sell  to  anybody. 

Mr.  Tincher.  Do  you  know  Richard  F.  McGoon  ? 

Mr.  Rogers.  Yes,  sir;  he  is  a shipper,  but  he  has  not  shipped 
any  stuff  in  there  for  four  or  five  years,  I believe. 

Mr.  Tincher.  Here  is  what  he  says: 

Q.  Well,  did  they  complain  any  to  you,  or  did  they  explain  to  you  at  any  time 
that  one  of  the  things  that  made  them  believe  they  had  to  give  Swift  the  first  chance 
was  that  if  they  sold  some  cattle  out  of  a lot  to  somebody  else  that  they  were  some- 
times told  they  had  better  go  sell  the  rest  of  them  to  the  same  man? 

A.  Yes,  sir;  I have  heard  that. 

Q.  Row  many  times  have  you  heard  that? 

A.  Many  times. 

Q.  And  from  different  commission  men? 

A.  Yes,  sir;  several  different  ones. 

Do  you  know  Charles  F earn  ? 

Mr.  Rogers.  No,  sir. 

Mr.  Tincher.  He  was  asked  if  he  had  any  trouble  buying  fat 
cattle  in  the  St.  Paul  yards,  and  he  answered: 

I can  give  you  an  instance:  Our  buyer  went  up  to  Prouty  & Co.’s  representative 
and  made  him  a bid  on  some  steers.  He  offered  him  7f  cents — I think  was  it  7f 
cents.  Prouty’s  man  said,  “Well,  wait  a minute.”  He  came  back  and  said  “Swift 
& Co.  want  those  for  7f.”  Our  man  said,  “Well,  isn’t  my  business  as  good  as  his?” 
He  said,  “Yes;  Swift  & Co.  want  them.  If  you  want  them  you  will  have  to  pay  a 
quarter  higher.”  Now,  those  steers  were  not  worth  a quarter  higher  on  the  market. 
In  other  words,  in  this  case  at  least  they  showed  favoritism  in  not  taking  the  first 
bid  they  received. 

Mr.  Rogers.  I don’t  know  of  anything  of  that  kind. 

Mr.  Tincher.  And  then  the  further  question  was  asked— 

Q.  Now,  have  you  had  any  other  experience  of  that  kind? 

A.  Yes;  we  have  had  a number. 

Q.  All  along  the  same  way? 

A.  Yes,  sir. 

Q.  And  with  different  buyers? 

A.  Yes,  sir. 

Q.  But  all  of  them  Swift  buyers,  or,  rather,  with  different  commission  men? 

A.  Yes,  sir 

46985—21 23 


354 


MEAT  PACKER. 


The  report  goes  on  to  state — 

Another  independent  packer  stated  to  two  representatives  of  the  commission  that 
in  several  attempts  to  buy  live  stock  at  the  St.  Paul  markets  he  had  experienced  so 
much  unfair  and  discriminatory  treatment,  such  as  is  described  above,  that  he  was 
forced  to  stay  out  of  that  market,  although  the  class  of  animals  offered  there  were 
most  desirable  for  his  plant. 

Do  you  know  anything  about  those  practices  being  indulged  in  in 
your  yards  ? 

Mr.  Rogers.  No,  sir;  I do  not. 

Mr.  Tincher.  These  men  I have  mentioned  to  you  seem  to  have 
been  sworn  and  to  have  given  sworn  testimony. 

Mr.  Rogers.  I have  said  that  I think  that  possibly  a good  many 
years  ago,  before  we  had  more  competition  in  there,  like  Armour  and 
these  other  men,  some  commission  men  were  really  afraid  of  Swift’s 
buyers,  and  probably  those  buyers  did  keep  them  cowed  as  much  as 
they  could  to  get  them  to  sell  to  Swift.  That  is  human  nature.  They 
were  human  the  same  as  other  people. 

Mr.  Purnell.  Did  you  read  the  statment  that  Mr.  Wells  made 
about  the  buying  of  Hormel  affecting  the  market  ? 

Mr.  Rogers.  Yes,  sir;  but  I do  not  think  it  is  at  all  true.  It  is 
not  in  the  way  he  puts  it.  Hormel  buys  hogs  quite  frequently,  and  I 
do  not  notice  any  big  jump  like  Mr.  Wells  said  occurred. 

Mr.  Purnell.  Do  }rou  notice  any  small  jumps? 

Mr.  Rogers.  I have  noticed  jumps  when  four  or  five  buyers  get  in 
there  besides  the  regular  buyers.  It  would  naturally  happen,  for  they 
would  have  to  give  more  than  the  packers  would  give. 

Mr.  Williams.  Mr.  Wells  says  there  is  no  real  competition  there. 

Mr.  Rogers.  I differ  with  him  on  that.  I say  there  is  not  only 
competition  between  Swift  and  Armour’s  buyers  and  the  other  big 
packers,  but  between  Swift  and  Armour  and  other  speculators  who 
are  buying  cattle. 

Mr.  Kincheloe.  But  he  refers  to  hogs. 

Mr.  Rogers.  There  are  lots  of  orders  coming  there  from  Eastern 
buyers. 

Mr.  Tincher.  When  did  Wells  come  there? 

Mr.  Rogers.  In  1920,  I think  it  was.  The  law  was  passed  in  1919. 

Mr.  Tincher.  He  is  rather  recommending  the  institution.  He  says 
you  have  it  in  pretty  good  shape  now,  and  claims  it  is  a good  place 
to  go  to,  for  people  to  ship  to. 

Mr.  Ten  Eyck.  Do  you  feel  that  your  yard  at  the  present  time  is 
run  as  well  as  any  other  yard  in  the  country  ? 

Mr.  Rogers.  I want  to  touch  on  that.  1 want  to  say 

Mr.  Ten  Eyck  (interposing).  Just  answer  that  question. 

Mr.  Rogers.  Yes,  sir;  I think  it  is. 

Mr.  Ten  Eyck.  Do  you  think  it  is  run  better  than  most  other 
yards  ? 

Mr.  Rogers.  Yes,  sir;  I do.  Mr.  Wells  states  that  when  he  came 
there  conditions  were  deplorable.  I do  not  hardly  know  how  to 
answer  that  statement.  1 wish  he  were  here  so  I could  answer  him 
in  the  right  way. 

Mr.  Tincher.  Don’t  you  think  he  is  right,  if  this  sworn  testimony 
as  to  the  condition  of  the  yards  in  1918  is  true? 

Mr.  Rogers.  There  may  have  been  some  condition  like  that  once 
in  a while,  that  a commission  man  was  afraid  of  a buyer  for  a packer. 


MEAT  PACKER. 


355 


Mr.  Tincher.  Well,  if  that  is  the  condition  what  do  you  say  ? 

Mr.  Rogers.  Well,  I never  knew  of  any  such  condition. 

Mr.  Tincher.  This  is  in  the  statement  of  the  Federal  Trade 
Commission,  and  quotes  the  testimony  of  witnesses  who  testified 
before  examiners  of  the  commission. 

Mr.  Rogers.  Gentlemen  of  the  committee,  quite  often  a shipper 
will  come  into  the  yard  and  he  may  think  he  has  been  mistreated. 
Lots  of  times  a commission  man  has  worked  very  hard  for  him  and 
yet  on  account  of  some  condition  he  may  think  he  has  been  mistreated. 

Mr.  Tincher.  What  do  you  think  about  his  being  mistreated 
according  to  these  statements?  Suppose  I had  a carload  of  cattle 
of  yours  and  one  man  was  willing  to  pay  20  cents  more  a hundred 
than  Swift  & Co.,  but  they  told  that  man  they  would  not  take  his 
bid  unless  he  made  it  25  cents  more  than  SAvift/s. 

Mr.  Rogers.  I would  think  that  was  mistreatment. 

Mr.  Tincher.  And  if  that  condition  existed  on  your  yards  before 
Mr.  Wells  came  there  that  condition  was  deplorable. 

Mr.  Rogers.  Mr.  Wells  has  not  corrected  any  such  condition  at  all. 
He  has  nothing  to  do  with  that  kind  of  supervision  at  all. 

Mr.  Tincher.  The  Government  ought  to  get  into  it  then. 

Mr.  Rogers.  The  improvement  there  is  because  we  have  nore 
competition  to-day  than  we  used  to  have. 

Mr.  Clarke.  Do  you  think  that  the  law  of  the  State  of  Minnesota 
has  had  anything  to  do  with  improvement  in  conditions  ? 

Mr.  Rogers.  No,  sir. 

Mr.  Clarke.  Was  the  improvement  in  conditions  prior  to  the 
passage  of  the  law? 

Mr.  Rogers.  Yes,  sir. 

Mr.  Clarke.  And  before  the  agitation  for  the  passage  of  a law? 

Mr.  Rogers.  Yes,  sir.  We  build  the  market  up  from  fifth  to 
fourth  place  before  Mr.  Wells  came  there. 

Mr.  Kincheloe.  Mr.  Wells  said  the  scales  were  out  of  fix. 

Mr.  Rogers.  Mistakes  will  sometimes  occur  in  weighing,  and  there 
have  been  just  as  many  since  he  came  there  as  before. 

Mr.  Jones.  How  about  breaks  in  scales? 

Mr.  Rogers.  I took  a letter  to  Mr.  Wells  not  over  a month  ago 
that  said  it  was  thought  some  mistake  had  been  made,  and  they 
examined  the  scales  thoroughly.  They  did  not  find  any  mistake, 
but  the  shipper  thought  there  was  a mistake  about  the  weighing. 
We  have  complants  about  weights  and  about  shrinkage. 

Mr.  Tincher.  Do  you  think  that  legislation  should  be  confined  to 
the  stockyards  ? 

Mr.  Rogers.  We  have  no  objection  to  Federal  supervision.  We 
do  not  have  any  objection  to  proper  State  supervision,  and  the  only 
objection  we  have  to  it  as  it  is  now  is  that  there  is  too  much  politics 
in  it,  and  it  is  costing  the  shippers  of  stock  to  South  St.  Paul  about 
$75,000  a year  when  it  should  not  cost  them  over,  say,  $5,000  or 
$10,000  for  what  they  are  doing. 

Mr.  Tincher.  The  man  who  just  left  the  stand  represents  a pack- 
ing company,  and  he  says  this  supervision  is  giving  your  stockyards 
a good  reputation  among  shippers. 

Mr.  Rogers.  He  said  it  was  hearsay  evidence  that  some  people 
have  more  confidence  in  the  market.  I do  not  think  it  hurts  the 
market.  I do  not  think  Mr.  Wells  has  hurt  the  market  at  all,  except 


S56 


MEAT  PACK  EH. 


he  is  going  out  and  claiming  a lot  of  things  for  the  market  that  are 
not  true. 

Mr.  Kincheloe.  If  that  expense  of  $75,000  is  unnecessary  it  should 
hurt  the  market. 

Mr.  Rogers.  I can  tell  you  where  it  is  unnecessary.  I can  get 
you  three  shippers  to  the  stockyards  to  oppose  this  legislation  where 
he  can  get  one  in  favor  of  it. 

Mr.  Kincheloe.  And  the  business  there  has  grown  in  spite  of  that. 

Mr.  Rogers.  No,  sir;  we  had  less  receipts  in  1920  than  we  had  in 
1919.  But  I do  not  attribute  that  to  Mr.  Wells’s  supervision.  I do 
not  think  he  drove  anyone  away  particularly. 

Mr.  Kincheloe.  What  was  the  cause  of  it? 

Mr.  Rogers.  Natural  conditions. 

Mr.  Kincheloe.  Then  you  do  not  attribute  that  loss  of  business 
to  the  law  and  to  the  expense  of  $75,000? 

Mr.  Rogers.  No,  sir;  I do  not  altogether,  but  it  may  have  had 
some  effect  on  it,  but  I would  not  say  it  did.  Here  is  where  our  ship- 
pers are  being  discriminated  against.  There  is  a charge  of  2 cents 
on  every  head  of  cattle  weighed.  If  they  are  weighed  five  or  six  times 
it  costs  2 cents  each  time.  The  speculators  have  to  pay  it  every 
time  they  are  weighed  for  them.  And  there  is  a cent  and  a half  for 
every  hog  and  a cent  for  every  sheep.  That  will  amount  to  more 
than  Mr.  Wells  said  on  the  receipts  we  had  there  last  year.  It  is  a 
considerable  amount,  $60,000  as  he  said,  but  it  amounts  to  more 
than  that.  Just  consider  the  amount  he  is  paying  the  weighmasters. 
The  same  yardage  is  being  charged  us  that  was  always  charged  us 
before  he  came  there.  So  this  $75,000  is  in  addition  to  what  the 
shipper  had  to  pay  to  get  the  stock  weighed  before  Mr.  Wells  came 
there. 

Mr.  Kincheloe.  How  about  the  dockers  ? 

Mr.  Rogers.  I do  not  think  he  understands  what  they  are.  When 
Mr.  Wells  came  there  the  exchange  took  out  15  cents  a head  for  each 
hog  coming  through,  and  hired  shrinkers  for  piggy  sows  and  stags. 
The  piggy  sows  were  shrunk  as  they  came  off  the  scales  and  marked 
on  the  ticket.  We  turned  that  over  to  Mr.  Wells.  He  was  the 
supervisor  and  we  passed  it  to  him.  He  talked  about  a hog  being 
shrunk  as  if  a hog  was  not — I don’t  believe  he  understands  it 

Mr.  Txncher  (interposing).  Oh,  well,  there  were  some  ladies  here 
and  he  did  not  want  to  talk  plainly.  He  said  the  hogs  that  were 
shrunk  were  stags  and  piggy  sows. 

Mr.  Rogers.  Yes,  sir;  and  he  has  the  same  dockers  exactly  that  we 
had  for  the  exchange. 

Mr.  Tincher.  You  took  15  cents  a head  on  all  hogs? 

Mr.  Rogers.  Yes,  sir. 

Mr.  Lightfoot.  Don’t  you  mean  15  cents  a car  instead  of  a head  ? 

Mr.  Rogers.  Well,  I did  mean  15  cents  a car. 

Mr.  Lightfoot.  I thought  you  had  misstated  that  and  wanted 
to  make  it  clear. 

Mr.  Rogers.  Yes,  sir. 

Mr.  Kincheloe.  Let  me  ask  you  for  information:  Mr.  Wells  is 
there  as  the  representative  of  the  State  of  Minnesota  by  reason  of 
the  State  law.  He  ought  to  be  as  a general  proposition  entirely  dis- 
interested because  he  does  not  owe  his  job  to  anybody  except  the 
State.  What  would  actuate  him  to  be  prejudiced  against  you  or 


MEAT  PACKER. 


357 


anybody  else,  or  to  make  a statement  that  those  stockyard  conditions 
have  improved  and  that  the  business  has  grown  except  that  it  was  a 
fact?  Why  should  he  be  prejudiced  in  the  matter? 

Mr.  Rogers.  Because  the  live-stock  exchange  passed  resolutions, 
when  they  put  in  this  charge  of  2 cents  a head,  as  an  unnecessary 
burden  on  the  shippers  and  it  should  not  be  done.  That  was  one 
thing  that  made  him  mad  at  us  I think,  or  irritated  him,  because  we 
passed  that  resolution.  We  figured  that  if  the  State  wanted  this 
regulation  set  up  it  ought  to  pay  it  out  of  the  general  taxes  instead 
of  charging  it  up  to  the  cattle. 

Mr.  Kincheloe.  Mr.  Wells  was  not  responsible  for  that  law,  was 
he  ? 

Mr.  Rogers.  He  was  responsible  for  that  provision.  It  was  put 
in  effect  by  the  railroad  and  warehouse  commission.  The  law  of  the 
State  did  not  put  that  charge  on,  but  the  commission  put  it  on  after 
Mr.  Wells  went  in  there. 

Mr.  Kincheloe.  It  was  left  to  the  discretion  of  the  commission  ? 

Mr.  Rogers.  Yes,  sir.  It  was  not  in  the  law,  unless  it  was  put  in 
at  the  last  legislature.  He  put  it  in  as  an  arbitrary  charge  against 
the  shipper. 

Mr.  Kincheloe.  Do  you  claim  that  if  these  laws  had  not  been 
passed  your  stockyards  would  have  grown  more  than  they  have  ? 

Mr.  Rogers.  No,  sir.  I would  not  claim  that.  I would  say  that 
in  spite  of  the  law  we  would  probably  have  had  less  cattle  and  hogs 
last  year  than  the  year  before. 

Mr.  Kincheloe.  It  looks  like  the  shippers  are  pretty  well  satisfied. 

Mr.  Rogers.  Some  are  not  on  account  of  this  charge. 

Mr.  Kincheloe.  You  may  have  an  individual  complaint  here  and 
there. 

Mr.  Rogers.  Some  are  satisfied  to  pay  it  because  they  like  to  have 
State  weighmasters.  But  they  have  the  same  weighmasters  that  the 
stockyards  company  had  before.  And  those  weighmasters  are  doing 
nothing  for  a great  part  of  the  time,  and  when  the  stockyards  com- 
pany had  them  they  could  use  them  for  other  work.  Now  they  can 
not  use  them  in  any  other  work,  so  that  35  or  40  men  are  lying  around 
doing  nothing  half  the  time. 

Mr.  Kincheloe.  Did  you  go  back  to  trough  feeding  before  Mr. 
Wells  came  there? 

Mr.  Rogers.  I think  we  did. 

Mr.  Kincheloe.  You  do  not  complain  of  the  law  on  account  of 
that  ? 

Mr.  Rogers.  No;  we  do  not  complain  of  that.  But  we  do  com- 
plain about  Mr.  Wells  claiming  certain  things  he  has  not  done.  He  is 
making  statements  all  over  the  country  in  order  to  stand  in  with  the 
shippers  that  he  has  saved  them  hundreds  of  thousands  of  dollars  in 
feed  charges.  I make  the  statement  that  the  stockyards  company 
has  made  more  money  since  Mr.  Wells  has  been  there  than  before. 

Mr.  Ten  Eyck.  Isn’t  Mr.  Wells  a booster  for  your  stockyards  up 
there? 

Mr.  Rogers.  I do  not  think  he  is  when  he  says  things  were  in  a 
deplorable  condition  and  that  the  scales  were  rotting  down. 

Mr.  Ten  Eyck.  He  says  they  were  but  now  are  corrected. 

Mr.  Rogers.  They  are  no  more  corrected  now  than  they  always 
have  been. 


358 


MEAT  PACKER. 


Mr.  Ten  Eyck.  Is  this  feeling  between  you  and  Mr.  Wells  jealousy 
or  emulation  ? 

Mr.  Rogers.  Emulation,  probably. 

Mr.  Kincheloe.  Have  you  made  more  money  since  Mr.  Wells 
came  there? 

Mr.  Rogers.  No,  sir;  we  have  had  less  stock  since  Mr.  Wells  has 
been  there  than  before. 

Mr.  Ten  Eyck.  Referring  to  Mr.  Tincher’s  case  here  of  discrimi- 
nation in  selling  by  commission  men  on  your  stockyards  several  years 
ago:  If  to-day  there  were  a case  of  that  sort  to  happen  and  it  was 
reported  to  Mr.  Wells  will  you  kindly  tell  us  just  what  would  be  done? 

Mr.  Rogers.  Well,  sir,  1 can  not  tell  you  what  would  happen. 

Mr.  Ten  Eyck.  Are  you  familiar  with  the  operation  of  your 
stockyards  ? 

Mr.  Rogers.  Yes,  sir;  very  familiar.  Mr.  Wells  has  not  done 
anything  since  he  has  been  there  to  correct  any  evils  that  exist. 

Mr.  Ten  Eyck.  I am  asking  you  what  would  happen,  not  what  he 
has  done.  What  would  happen  if  such  a case  were  reported  to  him 
to-day  ? 

Mr.  Rogers.  I suppose  he  would  take  it  under  consideration,  and 
probably  would  call  in  the  guilty  parties  and  talk  the  matter  over  with 
them,  and  that  is  about  all. 

Mr.  Ten  Eyck.  In  other  words,  he  would  not  do  anything  about  it  % 

Mr.  Rogers.  I think  Mr.  Wells  would  not  do  anything.  But  I 
think  if  that  sort  of  thing  would  happen  and  a charge  were  made  to 
the  exchange  somebody  would  be  fined  or  suspended.  We  have 
suspended  two  or  three  people  since  Mr.  Wells  has  been  there. 

The  Chairman.  Have  you  expelled  anybody  at  his  suggestion  ? 

Mr.  Rogers.  No,  sir. 

The  Chairman.  On  your  own  motion  ? 

Mr.  Rogers.  Under  their  own  volition  and  motion. 

Mr.  Purnell.  Which  one  of  you  is  correct  about  the  cost  ? Mr. 
Wells  said  the  cost  was  $60,000  and  you  say  it  is  $75,000  ? 

Mr.  Rogers.  I say  $75,000  or  more,  and  I think  I am  correct. 

Mr.  McLaughlin  of  Nebraska.  Is  it  untrue  that  the  scales  in  the 
stockyards  before  State  supervision  came  around  were  equipped  with 
10-pound  brakes  ? 

Mr.  Jones.  And  how  about  another  scale  ? 

Mr.  Rogers.  Oh,  I am  glad  you  spoke  about  that.  They  did  put 
in  a scales  after  he  came  there  that  would  weigh  I think  down  to  1 
pound.  They  put  a small  scales  down  in  the  sheep  yard.  That  is  the 
only  scales  I have  known  that  any  small  cattle — well,  no  cattle  have 
ever  been  weighed  on  them  but  sheep.  That  was  put  in  for  the  con- 
venience of  the  people  who  handle  a few  sheep  only.  That  was  put 
in  so  that  they  might  weigh  a few  sheep  on  them  instead  of  weighing 
them  on  the  other  scales  and  having  to  wait  in  the  sheep  alley.  We 
didn’t  have  but  one  scales  and  those  scales  were  put  in  to  weigh  a 
smaller  draft  on.  He  spoke  of  veal  calves  being  weighed.  I have 
never  known  any  to  be  weighed  since  he  came  there. 

Mr.  Purnell.  There  have  been  no  repairs  to  scales  nor  changes 
made  since  he  came  there  ? 

Mr.  Rogers.  Yes,  sir;  there  have  been  some  changes  made  as  to 
some  of  the  old  scales.  They  were  so  the  weighmaster  could  not  see 
very  plainly.  The  weighmaster  could,  but  the  man  standing  back 
weighing  could  not  see  all  the  way  through. 


MEAT  PACKER. 


359 


Mr.  Tincher.  You  spoke  about  the  weighmasters  being  used  for 
other  work.  I suppose  a man  could  leave  his  cattle  in  the  alley 
until  the  weighmaster  got  back  ? 

Mr.  Rogers.  Oh,  no.  You  know  sometimes  weighmasters  wdll 
be  busy  all  day,  and  on  other  days  they  will  be  busy  only  a short 
time. 

Mr.  Kincheloe.  Who  pays  the  weighmasters  ? 

Mr.  Rogers.  Mr.  Wells  pays  them. 

Mr.  Kincheloe.  It  comes  out  of  the  State? 

Mr.  Rogers.  No,  sir;  out  of  the  shippers.  I think  the  shippers 
should  not  have  to  pay  all  that  unnecessary  expense. 

Mr.  Kincheloe.  How  about  the  stockyards  ? 

Mr.  Rogers.  The  stockyards  charge  35  cents  a head  for  yardage 
of  cattle  and  that  included  the  weighing.  Now  they  charge  35  cents 
a head  for  yardage,  and  still  the  shipper  has  to  pay  2 cents  a head 
for  weighing. 

Mr.  Purnell.  1 do  not  think  this  is  very  important.  It  does 
not  refer  to  this  legislation. 

Mr.  Williams.  No;  and  I do  not  consider  Mr.  Wells’s  testimony 
very  important.  He  did  not  address  himself  to  the  proposed  legis- 
lation. 

Mr.  Rogers.  He  came  down  here  to  get  this  bill  amended. 

Mr.  Williams.  To  exempt  the  South  St.  Paul  stockyards. 

Mr.  Rogers.  I want  to  say  this,  that  the  South  St.  Paul  live- 
stock exchange  does  not  want  to  be  exempted  from  Federal  legis- 
lation if  you  pass  any. 

Mr.  Tincher.  You  need  not  worry  about  that. 

Mr.  Rogers.  We  do  not  believe  in  Federal  regulation,  but  if 
you  want  supervision  I do  not  know  but  what  it  might  be  a good 
thing. 

Mr.  Tincher.  I think  it  is  safe  to  tell  you  that  you  need  not 
worry  on  that  point. 

Mr.  Rogers.  I want  to  read  into  the  record  just  this  thing  and 
I will  not  keep  you  any  longer.  After  I left  there  was  a telegram 
sent  by  our  exchange  to  this  effect : 

South  St.  Paul,  Mins. 

Everett  C.  Brown, 

New  Willard  Hotel , Washington , D.  C.: 

The  South  St.  Paul  live  Stock  Exchange  is  opposed  to  Federal  legislation  class 
in  character  and  unnecessary  as  our  exchange  has  always  exerted  regulatory  meas- 
ures for  protection  and  interest  of  producers  with  all  the  effect  of  law  excepting  one 
particular,  that  being  the  entire  examination  of  members’  private  records.  Though 
we  have  no  objection  whatever  to  such  law,  impress  caution  and  careful  considera- 
tion on  the  part  of  Agricultural  Committee,  as  hasty,  inconsiderate  action  at  this  time 
when  we  are  seriously  affected  financially  would  be  ruinous  to  us  and  damaging  to 
our  patrons,  whose  present  condition  is  deplorable,  and  our  appeal  to  Congress  would 
be  to  help  rather  than  hamper  by  continued  agitation.  Peculiar  Minnesota  politics 
assisting  job-seeking  politicians  working  for  personal  gain  or  political  preferment  are 
lacking  the  desire  for  general  good.  We  are  now  contesting  State  laws  inspired  and 
enacted  by  influence  of  such  men  who  ask  Congress  to  except  Minnesota  markets 
and  leave  to  their  control.  Will  abide  by  Federal  laws  if  passed,  we  hope  without 
emasculation  or  amendment,  to  suit  some  job  hunters,  one  of  whom  is  now  in  the  Capi- 
tal and  whom  we  understand  is  to  be  appointed  on  our  State  railway  commission. 

Mr.  Kincheloe.  You  would  rather  be  under  a Federal  law  than 
under  the  Minnesota  State  law  ? 

Mr.  Rogers.  Yes,  sir;  exactly.  The  Minnesota  law  has  been  a 
farce. 


360 


MEAT  PACKER. 


Mr.  Kincheloe.  Of  the  two  evils  you  would  take  the  lesser? 

Mr.  Rogers.  Yes,  sir.  And  I just  want  to  tell  you  one  more 
thing  about  Mr.  Wells,  what  brought  about  the  first  clash  between 
the  live-stock  exchange  and  Mr.  Wells.  It  was  not  more  than  a 
month  ago  that  Mr.  Wells  issued  a circular  saying  he  had  saved  the 
shippers  a whole  lot  of  money  in  the  feed  business,  in  hay  and  corn 
bills.  We  claim  that  he  has  never  saved  them  a cent.  At  the  same 
time  that  he  issued  that  circular  he  entered  into  an  agreement  with 
the  stockyards  company,  in  order  to  get  more  money  to  run  his 
bureau  with,  that  he  would  allow  them  to  raise  the  price  of  corn  10 
cents  a bushel  to  shippers  if  they  would  give  him  50  cents  a car  for 
every  car  that  came  in.  Now,  that  was  not  robbing  anybody,  be- 
cause he  had  to  have  money,  but  it  was  camouflage.  He  was  trying 
to  make  the  shippers  believe  he  was  saving  them  money,  and  yet  he 
was  allowing  the  stockyards  company  to  charge  more  for  corn  and 
taking  a part  of  the  extra  charge.  I do  not  believe  we  should  have 
that  sort  of  thing. 

Mr.  Tincher.  Those  gentlemen  who  were  here  recommended 
Mr.  Wells  very  highly.  Mr.  Sullivan  did. 

Mr.  Rogers.  Mr.  Wells  is  all  right;  he  and  I are  good  friends, 
but  we  fight  now  and  then. 

Mr.  Kincheloe.  Would  you  mind  saying  who  this  worthy  man 
is  whom  you  intimate  is  expecting  to  get  a job  ? 

Mr.  Rogers.  Mr.  Wells  is  trying  to  get  on  the  railroad  and  ware- 
house commission. 

Mr.  Tincher.  The  man  I referred  to  was  Mr.  Sullivan. 

Mr.  Rogers.  Mr.  Sullivan  is  one  of  the  best  orators  and  best 
politicians  in  the  State.  But  we  want  to  be  taken  out  of  that  box. 
We  are  doing  a business  around  $200,000,000  a year.  We  know 
that  the  live  stock  exchange  can  correct  these  evils  better  than  State 
supervision;  and  still  we  do  not  fear  State  supervision  if  they  will 
give  us  a square  deal. 

Mr.  Kincheloe.  Does  Mr.  Wells  want  a job  under  this  law? 

Mr.  Rogers.  Mr.  Wells  is  now  supervisor  and  the  general  opinion 
is  that  he  is  trying  to  get  on  the  Railroad  and  Warehouse  Commission 
of  Minnesota. 

Mr.  Kincheloe.  He  is  trying  to  get  your  stockyards  exempted 
from  this  law. 

Mr.  Rogers.  And  if  he  landed  on  this  railroad  and  warehouse  com- 
mission we  would  be  under  him,  and  we  are  under  him  now,  as  he 
is  an  appointee  of  the  railroad  and  warehouse  commission. 

Mr.  Kincheloe.  And  you  do  not  want  to  add  insult  to  injury? 

Mr.  Rogers.  We  do  not  want  to  be  under  Mr.  Wells  or  under  the 
railroad  and  warehouse  commission  if  they  are  to  make  a political, 
football  of  us.  I think  that  60  per  cent  ot  75  per  cent  of  the  hones t- 
to-God  shippers  will  take  the  same  view. 

Mr.  Tincher.  You  passed  a grain  futures  act,  but  we  did  not  ex- 
empt Minnesota  from  our  bill,  and  we  are  going  to  keep  you  in  the 
Union. 

Mr.  Rogers.  They  passed  two  laws  that  will  knock  our  exchange 
out  of  the  box,  and  Mr.  Wells  helped  them. 

Mr.  Tincher.  And  there  was  a fellow  that  came  here  who  said  he 
put  a dagger,  section  3,  into  the  law  and  killed  the  whole  thing. 


MEAT  PACKER. 


361 


Mr.  Rogers.  Probably  I have  gotten  off  this  bill  quite  a good  deal. 
If  there  are  any  questions  you  gentlemen  want  to  ask  me,  I will  try  to 
answer  them  as  well  as  I can. 

Mr.  Voigt.  Mr.  Tincher  cited  some  cases  where  men  were  told  that 
they  would  have  to  pay  a quarter  more  in  order  to  get  certain  stock. 
Since  Mr.  Wells  has  been  in  charge,  have  you  heard  of  any  such  case  ? 

Mr.  Rogers.  No;  and  I never  did  hear  of  any  such  case.  I have 
never  heard  of  any  cases  since  or  before.  As  I stated,  a good  many 
years  ago,  when  we  did  not  have  as  much  competition  as  we  have  now, 
we  had  some  buyers  up  there,  and  they  were  buyers  for  Swift  & Co., 
too,  and  one  or  two  buyers  would  occasionally  try  to  bulldoze  some 
weak-kneed  commission  man. 

Mr.  Jones.  Did  any  of  those  men  ever  complain  to  you  about  that  ? 

Mr.  Rogers.  No,  sir. 

Mr.  Jones.  If  they  came  to  others,  it  looks  like  they  would  have 
said  something  to  you. 

Mr.  Rogers.  If  they  had  any  grievance  they  ought  to  have  brought 
it  before  the  exchange.  We  have  a committee  for  just  such  purpose — 
to  investigate  any  charge  of  wrongdoing,  or  wrong  handling  of  any 
customer,  whether  a member  of  the  exchange  or  not. 

Mr.  Jones.  They  knew  about  this  grievance  committee,  did  they 
not : or  it  is  a matter  of  general  information  ? 

Mr.  Rogers.  I think  so.  I know  that  Mr.  McGoon  did. 

Mr.  Tincher.  Those  were  independent  packers  in  1918  and  are 
probably  bankrupt  now. 

Mr.  Rogers.  Mr.  McGoon  used  to  be  a pretty  big  shipper  in  there. 
Lots  of  times  he  would  speak  when  he  did  not  have  any  reason.  He 
would  go  to  Chicago  and  not  get  any  more,  and  he  was  naturally  sore, 
and  of  course  would  blame  Swift’s  buyers,  because  a good  many  years 
ago  we  did  not  have  many  butcher  buyers,  not  many  buyers  except 
Swift  & Co.  and  speculators,  and  he  would  take  a chance  on  going 
somewhere  else. 

Mr.  Tincher.  This  is  all  since  Armour  has  been  there  ? 

Mr.  Wilson.  Armour  & Co.  have  only  been  there  about  a year  and 
a half  or  two  years. 

Mr.  Rogers.  And  Mr.  McGoon  has  not  been  there  for  five  years, 
I think. 

Mr.  Tincher.  He  says  he  had  to  quit.  Do  you  know  about 
Dickey — J.  E.  Dickey? 

Mr.  Rogers.  No,  sir. 

Mr.  Tincher.  He  says: 

A Swift  buyer  comes  up  and  makes  an  offer  of  7 cents  a pound,  or,  rather,  says  he 
thinks  they  are  worth  that  and  he  will  let  him  know  later  if  he  wants  to  take  them. 
Until  he  hears  from  the  buyer  again  the  commission  man  will  not  entertain  a bid  from 
anyone  else  of  1 0 or  20  cents  more.  If  he  does  he  is  likely  not  to  get  any  Swift  business 
for  a while.  It  is  only  when  the  other  bid  is  25  cents  a hundred  higher  than  the  Swift 
tentative  offer  that  the  broker  feels  he  can  accept  without  incurring  the  Swift  dis- 
pleasure. 

I do  not  know  Mr.  Dickey;  do  you  know  him? 

Mr.  Rogers.  I know  McGoon,  and  Decker  Bros,  at  Mason  City. 
Mr.  Hormel  has  been  buying  for  several  years,  and  we  have  sold  him 
lots  of  cattle,  and  so  have  others.  Our  firm  has  gone  two  or  three 
weeks  without  selling  a hoof  of  cattle  to  Swift  or  Armour  either,  and 
then  may  have  a big  run  of  cattle. 


362 


MEAT  PACKER. 


Mr.  Tincher.  Do  you  know  Mr.  Gehrman? 

Mr.  Rogers.  No,  sir. 

Mr.  Tincher.  You  know  Wells  and  McGoon  ? 

Mr.  Rogers.  Yes,  sir. 

Mr.  Gernerd.  Where  does  he  come  from  ? 

Mr.  Rogers.  Mr.  Wells  comes  from  the  western  part  of  the  State. 

Mr.  Gernerd.  He  is  a native  of  Minnesota? 

Mr.  Rogers.  Yes;  he  has  held  political  offices  for  a good  many 
years. 

Mr.  Gernerd.  You  do  not  think  that  is  to  a man’s  discredit,  do 
you  ? 

Mr.  Rogers.  No,  sir.  But  I think  they  are  as  a rule,  maybe,  poor 
business  men. 

Mr.  McLaughlin  of  Nebraska.  With  reference  to  Mr.  Wells’s  state- 
ment that  before  State  supervision  began,  75-pound  bales  of  hay  were 
being  sold  for  100  pounds  and  since  that  time  the  hay  has  been 
weighed  out;  what  have  you  to  say? 

Mr.  Rogers.  I am  glad  you  mentioned  that.  To  my  past  knowl- 
edge it  is  not  true.  For  many  years  the  stockyards  company  would 
take  a carload  of  hay  and  they  would  weigh  the  whole  car  and  count 
the  bales  and  average  the  weight  of  that  carload  and  sell  to  a com- 
mission man  at  so  much  a bale,  at  what  the  average  was  in  that  car. 
Later  on,  and  before  Mr.  Wells  came  there,  they  would  weigh  a wagon- 
load of  hay  and  bring  it  to  our  pens  and  deliver  it  to  us  at  the  average 
weight  of  bales  on  the  wagon.  The  way  we  then  handled  the  hay 
and  corn  business  in  South  St.  Paul  as  it  is  brought  to  the  commis- 
sion man’s  alley — well,  the  corn  we  would  put  in  the  locker.  It  is  all 
in  100-pound  sacks,  and  had  been  for  years  before  Mr.  Wells  came 
there.  The  hay  was  weighed  and  taken  to  the  alley  and  put  on  the 
fence.  The  shipper  would  come  along  and  we  would  feed  a bale  of 
hay  to  his  stock  and  charge  it  to  him.  The  bookkeeper  would  call 
up  the  office  and  ask  what  the  hay  averaged,  and  they  would  tell  him, 
probably  70  to  75  pounds  to  the  bale,  never  100  pounds. 

Mr.  McLaughlin  of  Nebraska.  Mr.  Wells  did  not  tell  the  truth 
about  anything  here,  did  he  ? 

Mr.  Rogers.  I can  not  see  much  in  his  testimony  but  what  the 
impression  given  is  wrong.  I do  not  think  he  meant  to  tell  un- 
truths, but  he  tried  to  give  the  impression  that  his  coming  there  had 
improved  those  yards. 

Mr.  McLaughlin  of  Nebraska.  Nevertheless  you  are  good  friends  ? 

Mr.  Rogers.  We  are  good  friends,  and  we  scrap  right  often  when 
we  meet,  and  I tell  him  just  what  I think. 

Mr.  Brown.  In  the  matter  of  the  names  Mr.  Tincher  has  read 
of  persons  who  have  complained  of  irregularities,  isn’t  it  a fact  that 
during  the  year  1918  there  would  be  30,000  or  40,000  shippers  in  the 
South  St.  Paul  market,  and  yet  here  are  only  five  men. 

Mr.  Rogers.  I think  it  would  average  more  shippers  than  that. 

Mr.  Brown.  Well,  I was  guessing  at  it.  The  percentage  is  not 
one-tenth  of  1 per  cent. 

Mr.  Tincher.  Do  you  mean  that  we  ought  not  to  pay  any  attention 
to  this  until  we  get  all  of  the  30,000  or  40,000  shippers  ? 

Mr.  Brown.  No.  But  I mean  that  is  the  percentage  of  complaints 
on  a large  live-stock  market. 

Mr.  Tincher.  No;  I do  not  think  that  is  a fair  proposition  at  all. 


MEAT  PACKER. 


363 


Mr.  Creigh.  I think  that  is  one  of  the  Heney  ex  parte  proceedings. 
I think  it  perfectly  natural  that  some  shipper  might  have  been 
jumping  on  a commission  man  because  he  did  not  think  he  got  as 
much  as  he  wanted,  and  yet  as  far  as  those  proceedings  are  concerned 
Swift  & Co.  had  no  right  in  those  proceedings  and  could  not  protect 
themselves. 

Mr.  Tincher.  I am  talking  about  a commission  man  who  ran  the 
business  in  that  way. 

Mr.  Creigh.  If  you  are  theorizing  that  the  commission  man  is 
doing  that,  why,  that  is  different. 

Mr.  Tincher.  If  a commission  man  would  tell  that  kind  of  story? 

Mr.  Creigh.  Suppose  it  is  untrue  ? 

Mr.  Tincher.  Then  he  ought  to  be  thrown  out  of  the  exchange. 

Mr.  Creigh.  That  is  a theory  proposition.  But  I want  you  to 
discredit  it  a little  bit  because  it  was  an  ex  parte  proceeding. 

Mr.  Williams.  Did  the  Federal  Trade  Commission  refuse  the 
packers  permission  to  offer  any  evidence  ? 

Mr.  Creigh.  Absolutely. 

Mr.  Tincher.  Did  not  the  packers  refuse  to  let  the  Federal  Trade 
Commission  have  any  records  ? 

Mr.  Creigh.  Cudahy  did  not.  We  had  inspectors  in  our  offices 
going  over  the  records  for  I do  not  know  how  many  months.  We 
sent  down  carloads.  Instead  of  taking  letters  as  a whole  they  would 
pick  out  certain  paragraphs.  If  you  will  notice  on  one  page  of  a 
letter  you  had  to-day  the  commission  admits  that  its  own  investigator 
wrote  certain  figures  on  the  letter  and  it  got  in  as  being  on  the  basis 
of  certain  percentages. 

Mr.  Jones.  When  they  got  those  things  didn’t  they  ask  somebody 
about  them  ? 

Mr.  Creigh.  We  do  not  know  who  they  asked,  but  they  did  not 
ask  us. 

Mr.  Clarke.  Was  information  furnished  by  your  employees  during 
that  time  and  all  the  time  ? 

Mr.  Creigh.  Absolutely  everything  that  was  asked  for. 

Mr.  Tincher.  I did  not  think  you  would  go  into  that.  That  is 
true,  but  that  is  not  the  whole  situation.  Didn’t  they  get  some 
records  without  your  turning  them  over  to  them?  Wasn’t  there 
considerable  trouble  about  the  Federal  Trade  Commission  going 
into  the  packers’  records  in  Chicago  ? 

Mr.  Voigt.  Wasn’t  there  some  trouble  about  opening  Mr.  Veeder’s 
vault  ? 

Mr.  Veeder.  I will  be  happy  to  tell  you  about  that. 

Mr.  Voigt.  I read  statements  about  both  sides  of  it  at  one  time. 

Mr.  Clarke.  I have  not  read  it  and  would  like  to  know  about  it. 

Mr.  Veeder.  In  the  first  place,  Mr.  Colver  himself  admitted  be- 
fore the  House  Committee  on  Interstate  and  Foreign  Commerce  that 
the  hearings  that  were  held  were  ex  parte,  and  that  the  packers  were 
not  permitted  to  cross-examine  witnesses  produced  by  the  Federal 
Trade  Commission  and  examined  by  Mr.  Heney,  nor  to  produce 
witnesses  of  their  own.  Mr.  Colver  himself  is  on  record  in  the  printed 
report  of  the  proceedings  before  the  Committee  on  Interstate  and 
Foreign  Commerce  of  the  House  of  Representatives  to  that  effect. 

One  of  the  first  hearings  that  Mr.  Heney  held  was  in  Boston.  At 
that  hearing  he  announced,  for  the  benefit  he  said  of  the  press,  that  it 


364 


MEAT  PACKER. 


was  not  to  be  a public  hearing,  and  that  it  would  be  ex  parte,  and  that 
no  one  would  be  permitted  to  be  represented  by  counsel  to  cross- 
examine  witnesses  or  to  bring  any  witnesses  of  their  own. 

Mr.  Clarke.  Is  that  in  this  record  ? 

Mr.  Veeder.  Yes,  sir;  at  the  hearings  held  last  September. 

Mr.  Tincher.  This  record  you  have,  Mr.  Clarke,  is  not  a part  of  the 
Heney  hearings. 

Mr.  Veeder.  Yes;  that  is  a part  of  the  Heney  hearings  taken  at 
St.  Paul. 

Now,  Mr.  Chairman  and  gentlemen  of  the  committee,  as  this  matter 
has  been  brought  up  I would  like  to  explain  things.  When  that 
investigation  was  announced  and  before  the  President  wrote  his 
letter  in  February,  1917,  I personally  and  other  packers  went  to  Mr. 
Hurley,  then  chairman  of  the  Federal  Trade  Commission,  and  stated 
that  we  would  be  very  glad  to  open  our  books  and  papers  without 
respect  to  interstate  commerce,  and  we  hoped  there  would  be  some- 
thing constructive  brought  out  of  such  investigation  if  it  ever  came. 

As  I have  said,  the  President  had  not  then  written  his  letter  but 
it  had  been  talked  about.  When  the  President  wrote  his  letter,  Mr. 
Swift,  president  of  Swift  & Co. — and  when  I speak  I speak  for  Swift  & 
Co.,  but  I think  the  others  did  the  same  thing,  but  of  course  I know 
what  Swift  & Co.  did — Mr.  Swift  wrote  to  the  chairman  of  the  Federal 
Trade  Commission  and  said  the  books  and  papers  of  Swift  & Co. 
were  open  and  that  we  would  welcome  an  investigation  and  be  glad 
to  do  what  we  could  to  help  in  it. 

Mr.  Swift  sent  a copy  of  that  letter  to  President  Wilson  likewise. 
When  the  investigation  came  on  they  went  into  our  files  and  saw 
every  piece  of  paper  and  every  record  in  the  packing  houses  and  in 
the  branch  houses.  They  picked  out  such  letters  and  such  parts  of 
letters  as  they  desired  to  use,  and  suppressed  such  letters  and  parts 
of  letters  as  they  did  not  like  the  looks  of. 

Mr.  Clarke.  Do  you  mean  to  say  that  they  would  not  take  the 
whole  letter  ? 

Mr.  Veeder.  No,  sir;  in  some  cases  they  would  take  parts  of 
letters  and  suppress  other  parts. 

Mr.  Voigt.  I particularly  had  reference  to  the  matter  about  your 
vault. 

Mr.  Veeder.  All  right,  I was  coming  to  that.  So  far  as  my  vault 
is  concerned,  after  the  investigation  had  been  going  on  for  some- 
thing like  eight  months  or  a year,  and  the  thing  lasted  about  two 
years;  and  after  they  had  failed  to  find  anything — well,  I believe  I 
am  stumbling  over  my  dates.  Let  me  start  back  and  get  it  chrono- 
logically. 

After  the  investigation  had  proceeded  for  some  months  at  the 
packing  houses,  and  they  had  had  the  Heney  hearings  all  around  the 
country — and,  by  the  way,  let  me  explain  as  I go  along,  that  at  the 
hearing  in  Chicago  which  Mr.  Heney  held,  one  of  the  attorneys  for 
one  of  the  packers  sent  a stenographer  to  take  notes  of  the  hearing. 
Mr.  Heney  asked  him  who  he  represented,  and  he  named  one  of  the 
attorneys  for  one  of  the  packers.  Mr.  Heney  said  he  must  get  out 
of  the  room,  that  he  would  not  be  permitted  to  stay  there  and  take 
notes  of  the  hearing.  Mr.  Heney  admitted  that  fact  at  the  time  I 
was  on  the  stand  before  the  Senate  Committee  on  Agriculture;  he 
himself  admitted  it  when  I charged  him  with  it. 


MEAT  PACKER. 


365 


So  far  as  my  vault  was  concerned,  after  the  hearing  had  been  going 
on  for  some  time,  one  of  Mr.  Heney’s  assistants,  Mr.  Mclsaac,  asked 
me  to  show  him  the  papers  in  my  vault;  saying  that  I was  counsel 
for  Swift  & Co.,  and  he  wanted  to  see  them. 

I stated  to  Mr.  Mclsaac  that  he  was  entitled  to  see  any  papers 
relating  to  Swift  & Co.,  but  that  he  was  not  entitled  to  see  any  papers 
that  belonged  to  my  personal  clients  or  papers  that  did  not  come 
within  the  scope  of  the  packing  industry.  I said  to  him  that  I would 
permit  an  examiner  to  glance  at  every  paper  he  desired  to  see  in 
order  to  convince  him  that  I was  not  keeping  from  him  papers  he 
was  entitled  to  see,  and  that  if  there  was  any  document  or  paper  as 
to  which  there  might  come  a disagreement  as  between  him  and  me 
as  to  wdiat  papers  he  was  entitled  to  see  and  use,  then  he  could  go  to 
the  court  and  get  an  order  from  the  court  under  the  Federal  Trade 
Commission  act  and  the  court  could  decide  whether  the  paper  came 
under  that  law  or  not. 

Mr.  Mclsaac  was  there  all  day.  I was  with  him  all  morning. 
After  I went  to  lunch  he  began  to  take  papers  that  had  no  reference 
to  the  packing  industry  and  that  he  had  no  right  to  have,  and  my 
assistant  took  them  away  from  him. 

That  next  morning  he  brought  an  assiatant  with  him,  I suddenly 
felt  that  Mr.  Mclsaac  had  left  the  room,  and  I asked  the  examiner 
where  he  was,  and  he  said  he  had  just  stepped  out  to  the  toilet  but 
that  he  would  be  right  back.  I went  out,  too,  and  as  I went  out  I 
saw  Mr.  Mclsaac  in  my  vault  making  a general  search.  I told  him 
to  get  out  and  he  got  out. 

He  continued  the  general  search,  but  he  wired  Mr.  Heney  that  I 
would  not  give  him  some  papers.  Mr.  Heney  notified  the  commission 
in  Washington  that  I had  refused  admission  to  his  assistant  to  my 
vault;  that  in  that  vault  wTere  all  the  papers  that  would  show  a con- 
spiracy among  the  packers  in  restraint  of  trade;  that  he  had  not  yet 
seen  any  of  them,  but  knew  they  were  there;  and  that  he  would  close 
the  hearing  in  Washington  and  come  to  Chicago. 

A couple  of  days  later  he  came  to  Chicago,  and  he  came  to  my  office. 
This  wras  on  a Monday,  and  we  sat  around  the  office  with  our  over- 
coats on.  Mr.  Heney  said  he  wanted  to  make  an  examination  of 
the  papers,  and  I repeated  what  I had  said  to  Mr.  Mclsaac.  Mr. 
Heney  said  he  would  like  to  see  some  papers,  and  I showed  him  some 
he  was  entitled  to,  regarding  Swift  & Co.  He  said  he  could  not  con- 
duct the  examination  under  those  circumstances  and  left  the  office. 

The  next  day  Mr.  Heney,  with  a large  force  of  deputy  marshals 
and  investigators,  came  in  with  a search  warrant  signed  by  Judge 
Landis,  and  began  to  go  into  the  vault  and  put  my  papers  and  docu- 
ments in  suit  cases  and  prepared  to  take  them  off.  I sent  an  assistant 
over  to  Judge  Landis  and  got  a stay  order  until  we  could  be  heard, 

I might  explain  that  the  search  warrant  had  been  issued  on  an 
affidavit  that  did  not  state  anything  as  a fact  at  all.  He  said  that 
it  was  believed  there  were  papers  at  a certain  address  which  had 
been  used  to  commit  a felony.  He  had  one  of  the  files  marked 
“ Judge  Landis,’’  and  another  file  marked  “ Supreme  Court  reports,” 
and  another  one  in  reference  to  a church.  He  had  a list  of.  every- 
thing under  the  sun.  The  idea  that  papers  under  those  titles  had 
been  used  to  commit  a felony! 


366 


MEAT  PACKER. 


And  this  search  warrant  had  been  issued  under  the  espionage  act, 
not  under  the  Federal  trade  act.  Judge  Landis  granted  a stay,  and 
a few  weeks  later  he  held  that  the  search  warrant  was  good.  Now, 
this  was  a search  warrant,  based  upon  information  and  belief,  de- 
scribing all  the  papers  in  my  files  without  anything  but  an  index. 

They  were  my  files  which  had  been  opened  some  30  years  before. 
There  was  no  limitation  whatever.  He  took  in  wills  of  my  clients, 
and  everything  we  had  in  the  office. 

We  appealed  to  the  circuit  court  of  appeals  in  Chicago,  and  the 
circuit  court  held  that  the  search  warrant  was  entirely  unjustified; 
and,  by  the  way,  that  decision  is  a very  interesting  one.  It  even 
went  back  to  the  dagger  with  which  Brutus  killed  Caesar,  and  dis- 
cussed that.  The  Government  then  asked  for  a writ  of  certiorari  to 
the  Supreme  Court,  and  it  was  granted. 

About  two  weeks  later  a Mr.  Chantland,  who  had  become  chief 
counsel  in  the  place  of  Mr.  Heney,  came  to  my  office.  Mr.  Chantland 
wanted  to  know  if  my  original  offer  made  to  the  Federal  Trade 
Commission  was  still  open,  to  see  what  papers  they  were  entitled  to 
see.  I said  it  was,  and  that  I would  be  glad  to  give  them  what  they 
were  entitled  to.  I said  to  him,  as  I had  said  before  to  Mr.  Mclsaac 
and  Mr.  Heney: 

Although  you  are  not  entitled  to  an  inspection  of  the  papers  at  all  that  you  are  not 
entitled  to  have,  I will  let  you  see  every  paper  in  this  office  for  a sufficient  inspection 
to  see  that  it  does  not  relate  to  the  subject  you  have  in  mind,  but  I will  not  let  you 
examine  it  and  read  it  carefully,  or  copy  it,  if  in  my  judgment  it  is  not  a paper  you 
are  entitled  to.  If  you  are  dissatisfied  with  that  then  you  can  step  right  over  to  the 
court  under  the  Federal  Trade  Commission  act  and  ask  for  a subpoena  duces  tecum, 
and  we  will  take  the  papers  over  before  Judge  Landis,  or  any  other  judge,  and  he 
will  decide  it.  and  he  is  the  proper  party  to  decide. 

He  said,  “All  right. ” He  added,  “Fine  and  dandy.”  They 
started  in,  and  had  six  examiners  at  work  for  six  weeks  and  I would 
let  them  see  everything  they  wanted  to  see. 

At  the  end  of  that  time  they  were  satisfied.  They  said  there  was 
not  much  that  they  wanted,  and  they  took  a copy  of  about  half  a 
dozen  letters. 

About  two  weeks  later  they  came  back  and  wanted  to  have  another 
inspection,  with  another  set  of  examiners.  At  that  time  they  spent 
another  three  weeks  there  examining  the  papers  that  the  previous 
examiners  had  examined,  and  marked  with  their  initials — -for  the 
purpose  of  seeing  whether  the  previous  examiners  had  been  honest. 

Mr.  Clarke.  For  what  purpose? 

Mr.  Veeder.  For  the  purpose  of  seeing  whether  the  previous  ex- 
aminers had  been  honest.  When  they  got  through  that  was  all 
there  was  to  it. 

Now,  let  me  say  this:  Before  Mr.  Mclsaac  telegraphed  Mr.  Heney, 
at  Washington,  that  I had  refused  access  to  the  papers  in  my  vault, 
Mr.  Mclsaac  asked  to  have  the  vault  sealed.  He  had  no  right  to  do 
that.  But  I said: 

Here,  I am  not  going  to  have  any  question  about  having  taken  papers  out  of  the 
vault  while  we  are  discussing  this  matter,  and  you  may  seal  it  up. 

And,  by  the  way,  gentlemen  of  the  committee,  it  is  a room  a good 
deal  larger  than  this  room. 

If  1 have  to  take  any  papers  out  of  that  vault  I will  telephone  your  office  and  you 
can  send  an  examiner  here  and  he  can  see  the  papers  that  are  taken  out  or  the  papers 
that  are  put  in. 


MEAT  PACKER. 


367 


So  the  vault  was  sealed. 

When  Mr.  Heney  came  there  it  was  several  days  after  that  inter- 
view I spoke  of— well,  I think  it  was  three  or  four  days  instead  of 
the  next  day.  I will  put  it  this  way:  I knew  that  Mr.  Heney  had 
come  to  town.  But  he  did  not  come  to  my  office.  It  ran  along  for 
three  or  four  days  before  he  came  to  my  office,  and  I had  to  send  for 
an  inspector  every  time  I wanted  a paper. 

Mr.  Mclsaac  came  up  one  day  to  let  me  get  some  papers  out.  I 
then  said  to  him: 

You  said  Mr.  Heney  would  be  here  a week  ago.  I am  going  to  open  that  door. 

He  said : 

I forbid  you  to  take  the  seal  off  that  door. 

I said  to  him: 

Come  on  and  see  me  do  it. 

I went  there  and  threw  the  lock  and  opened  the  door. 

Then  again  while  the  deputy  marshals  were  there,  and  the  exam- 
iners for  the  commission — and  they  had  six  men,  two  at  a time,  a 
marshal  and  an  examiner.  I do  not  know  why  they  should  have 
an  examiner  there,  too,  but  at  any  rate  the  door  was  kept  open, 
they  would  not  permit  it  to  be  shut,  and  electric  lights  were  kept 
going,  and  there  was  a marshal  and  an  examiner — 1 suppose  for  fear 
my  papers  might  walk  out. 

So  I had  six  watchers  to  watch  their  watchers.  And  those  four 
men  were  in  my  vault  watching  the  only  door  to  the  vault,  with  the 
lights  going.  I offered  the  marshal  the  opportunity  to  change  the 
combination  and  put  on  his  own  combination.  He  said  he  could 
not  do  that  as  I might  come  around  through  the  back  wall.  So  they 
insisted  on  being  there.  And  that  vault  was  in  that  condition  for 
three  months. 

Mr.  Tincher.  All  those  three  months  ? 

Mr.  Veeder.  Yes,  sir;  those  six  watchers  were  in  that  vault,  on 
three  8-hour  shifts.  There  were,  two  watchers  for  the  Government, 
and  two  watchers  for  me,  to  watch  the  Government  watchers. 

When  they  got  through  with  that  they  had  seen  every  paper  in 
that  vault  that  they  wanted.  And  in  that  connection  I want  to 
relate  a little  joke  on  them.  Beyond  this  big  vault  I had  a small 
vault,  with  another  combination  on  the  door.  When  Mr.  Heney 
came  in,  of  course,  he  got  into  that  big  vault,  and  then  he  discovered 
the  little  vault  door  was  locked. 

Mr.  Clarke.  Was  that  before  the  prohibition  act  went  into  effect  ? 

Mr.  Veeder.  Well,  that  was  not  any  fault  of  mine.  I had  nothing 
there  that  would  cause  any  such  procedure.  When  Mr.  Heney  dis- 
covered that  little  door  was  locked  he  asked  me  to  open  it.  I said 
to  him: 

I am  neither  a Federal  examiner  nor  a deputy  marshal.  You  are  making  this 
search;  you  open  it. 

They  sent  for  a burglar,  but  before  the  burglar  got  there,  or  as  he 
was  coming  in  with  his  tools,  the  stay  order  was  signed  and  they  did 
not  get  into  it.  But  after  these  marshals  had  been  curious  about  it, 
and  Mr.  Heney  himself  had  said,  when  he  did  not  find  what  he  was 
looking  for  outside,  that  it  must  be  in  that  vault,  I said: 

I have  shown  you  everything,  and  there  is  only  one  place  I know  of  where  we  might 
have  the  beef  trust. 


368 


MEAT  PACKER. 


They  said  they  wanted  to  see  that  vault.  I opened  it,  and  there 
was  not  a scrap  of  paper  in  there.  It  was  a little  extra  space  where 
there  was  a dead  end,  and  I asked  the  building  people  if  I could  have 
it,  and  they  gave  it  to  me.  I have  never  yet  been  forced  to  use  it. 

Mr.  Tincher.  You  have  not  been  at  home  enough  lately  to  use  it  ? 

Mr.  Veeder.  No;  I have  spent  the  most  of  my  time  down  here 
either  before  this  committee  or  before  the  Senate  committee. 

Mr.  Lightfoot.  While  you  are  on  the  subject,  will  you  not  state 
about  the  investigation  ? 

Mr.  Veeder.  In  those  investigations  Mr.  Ileney,  who  was  the  chief 
counsel  for  the  Federal  Trade  Commission,  would  have  an  examiner 
who  would  sit  as  judge  presiding.  Heney  would  take  up  letters  which 
the  Federal  Trade  Commission  already  had  and  which  had  been 
turned  over  to  them,  and  he  would  read  them  into  the  record,  and 
then  he  would  make  comments  upon  them  to  suit  himself,  his  own 
conclusions,  and  would  turn  them  over  to  the  newspaper  men,  and 
the  newspaper  men  would  turn  them  back  to  the  official  stenographer 
to  be  placed  in  the  official  record.  I accused  Mr.  Heney  of  that  over 
in  the  Senate  hearing  and  he  admitted  it. 

On  another  occasion  there  was  another  hearing  in  another  room  of 
the  Federal  building  at  Chicago  near  the  room  where  Mr.  Heney  was 
holding  his  hearing,  the  other  hearing  being  before  Judge  Alschuler  j 
on  the  question  of  wages.  Mr.  Heney  read  into  the  hearing  a list  of  : 
officers  of  Swift  & Co.  and  their  salaries,  that  the  Federal  Trade 
Commission  had  taken  from  the  files  of  Swift  & Co.,  and  then  handed  1 
the  document  or  sent  it  to  Mr.  Walsh,  attorney  for  the  labor  union,  ' 
so  he  could  read  it  into  their  record.  When  I complained  of  that  at 
the  hearing  over  in  the  Senate,  when  Mr.  Heney  was  examining  me, 
he  admitted  it,  and  said  he  thought  it  was  proper  to  have  private  - 
papers  read  for  public  good,  and  he  had  allowed  them  to  be  read  into  ; 
a private  record,  or,  I mean  private  litigation,  although  the  statutes  < 
forbade  it.  He  said  that  he  considered  his  hearing,  which  he  was  i 
holding,  had  made  the  records  public  by  his  reading  them,  and  that  \ 
he  sent  them  over  to  be  used  against  us  in  the  other  litigation. 

Likewise,  there  was  a provision  in  the  Federal  Trade  Commission 
act  forbidding  examiners  to  take  original  papers.  Or,  let  me  make  it 
conversely.  Examiners  have  the  right  to  examine  and  copy  but  not 
the  right  to  take  original  papers.  We  are  still  short  some  number  of 
original  papers  that  were  taken  during  that  time,  which  the  examiners 
insisted  on  taking  and  dared  our  employees  to  take  away  from  them 
by  force.  Rather  than  have  a fight  right  there  the  employees  let 
them  take  the  papers,  and  they  still  have  them. 

Here  is  the  statement  that  Mr.  Heney  made  at  Boston,  which  was 
one  of  the  first  hearings,  maybe  the  second  hearing,  and  they  lasted 
about  two  months,  or  I think  three  months  in  different  parts  of  the 
country — Chicago,  St.  Paul,  Kansas  City,  Washington,  Omaha, 
Baltimore.  This  was  at  a hearing  in  Boston  on  December  28,  1917 : 

Commissioner  Murdock.  This  meeting  will  come  to  order.  This  is  a hearing  held 
by  the  Federal  Trade  Commission  under  the  direction  of  the  President  of  the  United 
States,  and  the  authority  of  Congress,  in  an  inquiry  into  the  food  products  of  the 
country,  and  the  high  cost  of  living. 

Proceed,  Mr.  Heney. 

Mr.  Heney.  Mr.  Commissioner,  I should  like  to  ask  for  an  order  at  this  time  exclud- 
ing all  witnesses  from  the  room  with  the  exception  of  the  witness  who  is  being  examined, 
following  the  same  policy  we  followed  in  Washington  at  the  commencement  of  the 
hearings. 


MEAT  PACKER. 


369 


Commissioner  Murdock.  That  order  will  be  made. 

Mr.  Heney.  I think  it  might  be  well  for  me  to  state  for  the  benefit  of  the  members 
of  the  press,  that  this  investigation  is  not  a trial  in  which  any  parties  are  defendants 
and  thereby  entitled  to  appear  by  attorney.  It  is  an  investigation  into  the  economic 
conditions,  as  well  as  practices  that  may  be  prevailing,  and  it  is  ex  parte,  and  while 
the  commission  will  be  glad  to  hear  any  witness  that  presents  himself  here,  no  one 
comes  here  with  the  right  to  be  represented  by  attorneys,  with  the  right  to  put  on 
witnesses,  because  there  is  no  investigation  of  that  sort  being  conducted. 

However,  the  Federal  Trade  Commission  did  have  an  expert 
attorney  there  to  examine  any  witness  we  put  on,  and  to  examine 
their  own  witnesses,  but  we  had  no  power  except  to  come  in  ourselves, 
not  to  call  witnesses  or  cross-examine  the  Government  witnesses 
or  to  examine  our  own  witnesses. 

Mr.  Tincher.  When  you  say  they  had  an  attorney  there  you  mean 
Mr.  Heney  himself  ? 

Mr.  Veeder.  Yes.  Of  course  we  began  to  complain  of  the  pro- 
ceedings at  once.  I wrote  a letter  to  Mr.  Davies,  who  was  then 
chairman  of  the  Federal  Trade  Commission,  reminding  him  of  his 
promise  to  me  personally,  the  same  promise  Mr.  Hurley  had  made, 
that  the  packers  would  not  be  held  up  to  public  opprobrium  in  the 
press  until  they  had  had  a chance  to  be  heard.  I wrote  to  Mr.  Davies 
complaining  about  the  press  reports  that  were  coming  out  about  the 
packers  about  which  we  knew  nothing  until  we  saw  them  in  the 
papers.  1 received  a reply  from  Mr.  Davies  that  Mr.  Heney  was  in 
charge  of  the  investigation  and  that  we  should  take  up  everything 
with  him.  That  was  from  the  chairman  of  the  commission. 

When  we  found  it  was  futile  to  appeal  to  the  commission  we  ap- 
pealed to  the  President  of  the  United  States.  We  wrote  him  several 
letters  setting  out  the  way  the  proceedings  were  being  conducted, 
and  in  those  letters  we  asked  that  they  be  properly  conducted. 

When  the  original  summary  was  issued  it  was  found  by  us  to  be 
full  of  errors,  and  we  wrote  Mr.  Colver  calling  attention  to  the  fact 
that  it  was  erroneous,  that  we  had  not  had  an  opportunity  to  be  heard, 
and  that  we  believed  if  we  could  go  over  the  data  which  he  had  with 
their  examiners  that  it  would  result  in  a correct  report  which  would 
be  of  benefit  to  the  industry,  and  that  a false  report,  such  as  he 
putting  out,  would  be  a very  serious  injury  to  the  packing  industry. 

We  received  a letter  from  the  chairman  of  the  Federal  Trade 
Commission  in  which  he  said  that  if  it  was  advisable  for  us  to  be 
heard  we  would  be  advised.  That  was  the  reply.  We  never  did 
have  an  opportunity  to  go  before  the  Federal  Trade  Commission  to 
offer  to  explain  what  they  had  done  or  to  explain  letters  and  papers 
they  had  taken. 

I have  in  my  hand  Swift  & Co.’s  analysis  and  criticism  of  Part  II 
of  the  Report  of  the  Federal  Trade  Commission  on  the  meat  packing 
industry  of  November  25,  1918.  I will  be  very  glad  if  any  of  you 
are  interested  to  see  that  you  . are  furnished  with  copies  of  it,  and  if 
you  have  read  the  Federal  Trade  Commission’s  report  it  is  only  fair 
that  you  should  read  the  reply  of  Swift  & Co.  to  that  report. 

Mr.  Voigt.  It  is  probable  that  the  law  may  not  have  been  exactly 
followed  in  granting  that  right  of  search,  but,  as  a matter  of  fact, 
did  the  Federal  Trade  Commission,  by  reason  of  that  illegal  search, 
get  any  evidence  that  cuts  much  figure  in  this  case? 

Mr.  Veeder.  No,  sir;  they  did  not  get  any  evidence  at  any  time 
or  place  that  cut  any  figure  in  this  case. 

46985—21 24 


370 


MEAT  PACKER. 


Mr.  Voigt.  Is  any  part  of  the  records  that  they  took  from  your 
vault  or  files  contained  in  the  report  of  the  Federal  Trade  Commission  ? 

Mr.  Veeder.  Oh,  yes.  They  copied  quite  a number  of  letters  that 
were  found  in  my  vault.  Every  time,  however,  that  they  copied  a 
letter  from  my  vault  they  distinguished  me  from  the  other  defendants 
by  identifying  it  as  “from  the  vault  of  Henry  Veeder,”  so  that  the 
public  might  know  that  they*  came  from  my  vault. 

Mr.  Voigt.  Do  you  claim  that  there  is  anything  erroneous  in  the 
report  of  the  Federal  Trade  Commission  as  taken  from  your  vault? 

Mr.  Veeder.  Yes,  sir;  the  construction  put  upon  practically  every 
paper  taken  from  my  vault  is  erroneous. 

Mr.  Voigt.  Aside  from  the  construction,  did  they  furnish  a correct 
copy  of  all  the  papers  taken  from  your  files,  so  far  as  they  used  them  ? 

Mr.  Veeder.  They  copied  them  correctly  and  then  proceeded  to 
construe  them. 

Mr.  Voigt.  What  you  are  complaining  about  is  the  construction 
they  put  upon  the  papers  taken  from  your  files? 

Mr.  Veeder.  Oh,  yes. 

Mr.  Tincher.  I do  not  understand  what  papers  they  got.  “Ex- 
hibit 4,  correspondence  regarding  cooperation  of  live-stock  commis- 
sion men  with  packers  to  defeat  Borland  resolution”;  that  was  not 
from  your  files,  was  it  ? 

Mr.  Veeder.  No,  sir;  but  they  put  as  deliberate  a misconstruction 
upon  that  as  they  did  any  of  the  papers  taken  from  my  files. 

Mr.  Voigt.  Whenever  the  Federal  Trade  Commission  in  its  report 
has  quoted  words  alleged  to  have  come  from  and  to  be  the  copy  of 
some  document  or  letter,  they  have  always  made  a correct  copy, 
haven’t  they? 

Mr.  Veeder.  No,  sir;  I know  of  cases  where  they  have  not. 

Mr.  Voigt.  In  any  cases  where  they  have  not  I would  like  for  you 
specifically  to  point  out  wherein  the  copy  is  not  correct. 

Mr.  Veeder.  Mr.  Voigt,  that  has  all  been  done  and  it  is  printed. 
You  will  find  that  in  Mr.  Weld’s  testimony  and  in  mine.  There  are 
thousands  of  pages.  It  is  all  here  on  the  table,  in  the  report  of  the 
Senate  Committee  on  Agriculture  at  a three  months’  hearing.  And  in 
the  hearing  held  by  this  committee  there  was  a lot  of  it  put  in. 

Mr.  Voigt.  I attended  the  hearings  here  and  we  sat  here  about  a 
month  or  more  last  year,  and  I attended  quite  faithfully.  I do  not 
recall  a single  instance  that  was  pointed  out  where  there  was  a dis- 
crepancy that  was  at  all  material. 

Mr.  Veeder.  That  is  not  what  you  asked  for  before.  You  asked 
me  to  point  out  instances  where  they  had  not  correctly  quoted  some 
letter  or  paper.  They  were  here  charging  a great  industry  with  a 
great  crime.  They  were  doing  it  on  ex-parte  evidence  and  were 
drawing  conclusions  from  that  evidence.  They  were  bound  to  be 
absolutely  correct  and  accurate  before  charging  this  industry  with 
that  crime.  I do  not  think  we  need  to  go  into  that  here,  but  I will 
say  this,  that  Mr.  Creigh  has  in  mind  one  instance  and  there  are 
others.  I know  what  he  has  in  mind,  and  I will  be  glad  if  you  want 
one  instance  to  have  him  state  it.  If  you  want  more,  there  is  a hat 
full  of  them  in  that  record.  If  you  will  take  the  two  records  and 
read  them,  you  will  find  many  instances.  I do  not  know  whether 
you  wish  to  take  up  the  time  of  this  hearing  for  that  purpose  or  not, 
but  you  can  find  them  all  there  in  the  record. 


MEAT  PACKER. 


371 


Mr.  Tincher.  Where  is  Mr.  Weld  ? 

Mr.  Veeder.  He  is  on  his  way  to  England.  And,  by  the  way,  he 
has  gone  over  there  to  counteract  the  effect  of  the  Federal  Trade 
Commission  sending  these  ex-parte  reports  to  the  heads  of  the 
European  Governments  with  the  suggestion  that  those  Governments 
ought  to  get  together  with  this  Government  for  the  purpose  of  sup- 
pressing this  industry,  this  monopoly,  as  they  spoke  of  it,  which 
they  are  condemning  upon  this  ex-parte  evidence. 

Mr.  Tincher.  I inquired  about  Mr.  Weld  simply  as  an  acquant- 
ance  and  through  curiosity.  But  since  you  have  mentioned  that,  do 
you  mean  that  the  Federal  Trade  Commission  has  officially  sent  that 
information  abroad  ? 

Mr.  Veeder.  I mean  that  very  thing,  and  it  is  in  the  record  of  the 
hearing  of  last  September. 

Mr.  Williams.  Who  were  they  sending  it  to  ? 

Mr.  Veeder.  They  sent  a letter  to  the  Secretary  of  State.  With 
that  letter  they  inclosed  a form  letter  to  be  sent  to  all  those  countries 
that  they  named,  the  heads  of  the  various  countries,  England,  Bel- 
gium, France,  etc.,  the  whole  bunch  of  them.  They  sent  that  with 
a form  letter. 

Mr.  Lightfoot.  After  the  summary  of  the  report  of  the  Federal 
Trade  Commission  was  issued,  in  which  it  charged  that  the  five  large 
packers  were  in  combination  and  were  a monopoly,  not  only  in  re- 
straint of  trade  in  this  country  but  throughout  the  world,  and  that 
at  a time  when  the  Allies  were  depending  upon  this  country  largely 
for  its  food  supplies,  they  said  that  unless  something  was  done  to 
curb  this  monopoty  it  would  involve  us  in  international  complications 
with  the  other  countries  of  the  world,  or  language  to  that  effect. 
That  was  the  sense  of  it. 

This  summary  contains  quite  a number  of  statements  relating  to 
our  foreign  business.  They  stated  how  many  plants  we  have  in 
foreign  countries,  and  the  volume  of  business  we  have  in  foreign 
countries.  The  Federal  Trade  Commission  wrote  a letter  to  the 
Secretary  of  State  of  the  United  States,  in  which  it  was  suggested 
that  a copy  of  this  summary  be  sent  to  the  heads  of  every  civilized 
Government  of  the  world,  except  Russia  and  Germany,  and  perhaps 
Austria.  We  were  at  war  with  Germany  at  that  time.  The  com- 
mission inclosed  a form  letter  to  be  used  in  the  transmission,  and 
the  particular  letter  that  was  written  out  was,  for  example,  addressed 
to  the  “President  of  Switzerland.’'  It  contained  language  from 
which  I think  anyone  who  received  it  would  naturally  assume  that 
it  was  being  sent  at  the  suggestion  of  the  President  of  the  United 
States,  because  it  said:  We  enclose — well,  I will  give  it  to  you 
to-morrow  morning. 

Mr.  Tincher.  Was  that  sent  out  by  the  Secretary  of  State? 

Mr.  Lightfoot.  Yes,  sir. 

Mr.  Tincher.  When? 

Mr.  Lightfoot.  Immediately  afterwards.  It  is  presumed  it  was 
sent  right  out. 

Mr.  Tincher.  Secretary  Hughes  did  not  send  that  out,  did  he  ? 

Mr.  Lightfoot.  Oh,  no,  not  the  present  Secretary  of  State.  It 
was  immediately  after  the  issuance  of  the  report,  in  September,  1918, 

I believe  it  was. 


372 


MEAT  PACKER. 


Senator  Sherman  introduced  a resolution  in  the  Senate,  calling 
upon  the  Federal  Trade  Commission  to  transmit  to  the  Senate  all 
correspondence  which  they  had  in  their  records  showing  what  activi- 
ties the  commission  had  had  in  relation  to  foreign  business,  especially 
with  reference  to  the  meat  packers  of  this  country.  The  Federal 
Trade  Commission  transmitted  to  the  Senate,  in  response  to  that 
resolution,  letters  and  files  and  documents  relating  to  the  foreign 
business,  and  in  which  there  was  a copy  of  this  letter  which  they  had 
sent  to  the  Secretary  of  State,  and  a copy  of  the  form  letter  which 
was  to  he  used;  and  it  is  to  be  presumed  of  course  that  he  sent  the 
letters  and  reports  as  requested. 

Not  only  did  they  say  in  that  letter  that  he  should  transmit  the 
letter  directly  to  the  heads  of  the  Governments  named,  but  in  order 
to  make  sure  that  those  Governments  would  receive  these  documents 
they  stated  they  had  forwarded  two  copies  to  the  Embassies  of  every 
one  of  those  foreign  Governments  located  in  Washington. 

And  I know  that  some  of  those  countries  received  them,  because 
one  of  our  representatives  happened  to  walk  into  the  Ministry  of 
Agriculture  of  Greece;  he  had  some  business  with  the  minister,  and 
he  introduced  himself,  and  the  minister  said : 

Why,  yes;  here  is  a report  I have  of  the  Federal  Trade  Commission.  I know  who 
you  are.  You  are  one  of  the  monopoly  over  there,  the  Meat  Trust. 

The  minister  had  this  copy  on  his  desk,  with  certain  paragraphs, 
blue  penciled.  If  you  will  be  interested  in  it  I can  give  you  copies  of 
this  letter  which  the  Federal  Trade  Commission  voluntarily  trans- 
mitted to  the  vSecretary  of  State  for  transmission  directly  to  the  head 
of  every  civilized  country  in  the  world,  except  three  or  four  I think 
that  were  mentioned. 

Of  course  this  is  a matter  that  has  been  gone  over  before,  and  I 
do  not  want  to  make  attacks  upon  the  Federal  Trade  Commission. 
However,  I think  it  is  proper  that  the  new  members  of  this  committee 
should  know  how  we  have  suffered,  and  what  we  have  had  to  fight 
against,  and  why  for  three  years  we  have  been  compelled  to  stand 
up  and  fight. 

Mr.  Williams.  Senator  Sherman  made  a speech  just  before  the 
close  of  the  last  session  wherein  he  went  into  the  facts  of  our  foreign 
trade  and  the  effect  of  the  dissemination  of  this  report  thereon. 

Mr.  Tincher.  Is  there  anything  in  the  Federal  Trade  Commission 
act  which  would  authorize  the  Federal  Trade  Commission  to  take 
such  a step  as  that  ? 

Mr.  Lightfoot.  I thought  the  Federal  Trade  Commission  was  for 
the  purpose  of  encouraging  foreign  business,  but  instead  of  looking 
after  the  welfare  of  American  business  and  the  American  producer, 
I take  it  that  ex  parte  report  was  sent  abroad  for  the  purpose  of 
prejudicing  American  industry  in  foreign  countries.  If  not,  why 
was  it  sent  ? 

Mr.  Clarke.  What  would  be  the  theory  behind  such  action  by  the 
Government  officials  ? 

Mr.  Lightfoot.  That  is  a pretty  big  question.  Why  any  agency 
of  our  Government  would  conduct  an  ex  parte  investigation,  and  take 
from  our  files  papers  and  draw  their  own  conclusions  apparently 
along  the  line  of  preconceived  ideas,  is  past  my  comprehension. 
And  then  to  set  to  work  in  an  attempt  to  injure  our  foreign  business. 


MEAT  PACKER. 


373 


I think  it  was  directly  becase  of  that  action  that  the  English  Govern- 
ment rehabilitated  the  food  ministry  in  England  shortly  after  the 
armistice  was  declared,  at  which  time  they  pointed  out  its  necessity, 
based  upon  the  idea  that  this  “ great  trust”  controlled  the  meat 
supplies  of  the  world,  and  said  that  because  of  its  existence  and  oper- 
ation it  was  necessary  to  maintain  a food  ministry  and  have  one 
agency  to  buy  all  of  the  meat  for  consumption  in  England. 

They  sent  a man  over  herewith  all  the  concentrated  power  of  a single 
individual  purchasing  the  total  meat  supplies  for  England,  and  pro- 
ceeded to  dictate  at  what  price  he  should  have  those  meats.  That 
was  the  beginning  of  the  decline  of  meat  values  in  this  country. 
And,  to  my  mind,  it  has  cost  the  producers  of  cattle  in  this  country 
millions  upon  millions  of  dollars — the  fact  that  we  have  had  to  sell 
through  a single  purchaser  the  meat  supplies  of  England  continuously 
from  that  time  until  just  a short  time  ago.  I believe  they  have  now 
dissolved  that  ministry.  We  are  now  for  the  first  time  since  the 
armistice  beginning  to  reach  a point  where  we  can  sell  meat  to  more 
than  one  individual  in  England. 

Mr.  Clarke.  I have  not  quite  clearly  the  date,  was  it  before  the 
armistice  or  afterwards  ? 

Mr.  Lightfoot.  It  was  the  fall  of  1918.  It  was  about  the  time  of 
the  signing  of  the  armistice.  This  matter  was  the  subject  of  an  in- 
vestigation by  the  Board  of  Trade  in  England. 

Mr.  Clarke.  I am  trying  to  get  in  my  own  mind  the  motive  behind 
this  act  of  the  Federal  Trade  Commission  about  which  you  complain. 
Wouldn’t  it  be  that  the  preparation  of  this  letter  was  before  the 
signing  of  the  armistice  on  the  theory  that  they  might  possibly  get 
down  the  price  for  all  of  those  who  were  conducting  a fight  with  us 
and  for  us  ? 

Mr.  Lightfoot.  I am  sorry  to  say  that  I can  not  tell  you  what  their 
motive  was. 

Mr.  Tincher.  This  report  was  not  gotten  out  in  time  to  have  any 
effect  on  that. 

Mr.  Lightfoot.  The  report  was  about  the  time  of  the  armistice, 
I think.  Armour  bought  a plant  in  New  Zealand.  I believe  one  has 
to  have  a license  to  export  any  meat  or  meat  products  out  of  New 
Zealand.  All  packing  concerns  that  ship  products  out  of  New 
Zealand  must  have  authority  from  some  ministry  established  in 
that  country.  Armour  went  over  there,  thinking,  I suppose,  that  he 
would  transact  some  business  from  New  Zealand,  and  bought  the  busi- 
ness there.  When  the  report  of  the  Federal  Trade  Commission  came 
out  the  authorities  in  New  Zealand  took  that  report  and  accepted 
it  as  proof  of  the  fact  that  Armour  was  a monopoly  in  restraint  of 
trade,  and  cancelled  his  license  and  refused  him  permission  to  export 
anything  out  of  New  Zealand,  and  he  has  not  been  able  to  get  a 
license  since,  just  because  they  accepted  this  ex  parte  statement  as 
proof.  In  other  countries,  especially  in  England,  great  credit  is 
given  to  any  report  of  the  Government,  as  they  should  be  in  every 
case  entitled  to. 

Mr.  Tincher.  I think  perhaps  there  are  occasions  when  a depart- 
ment of  the  Government  should  make  ex  parte  investigations. 

Mr.  Lightfoot.  But  I think  they  should  be  treated  as  such.  They 
probably  have  their  purpose,  and  all  that  sort  of  thing,  but  they 
should  be  so  distinctly  understood.  This  information  has  gone  to 


374 


MEAT  PACKER. 


foreign  countries  through  the  office  of  the  Secretary  of  State  of 
this  country.  The  Federal  Trade  Commission  did  not  presume  to 
send  it  direct  itself.  I imagine  that  if  you  wished  to  reach  the  head 
of  the  Government,  the  State  Department  would  be  the  natural 
channel  it  would  go  through. 

Mr.  Tincher.  I imagine  if  I would  mail  one  of  these  to  Secretary 
Hughes  with  such  a request  he  would  mail  it  back  with  his  compli- 
ments. 

Mr.  Ten  Eyck.  Before  this  hearing  closes  I am  going  to  ask  that 
some  member  of  the  Federal  Trade  Commission  be  asked  to  come  here 
and  make  an  explanation  of  this. 

Mr.  Lightfoot.  I saw  in  looking  at  this  letter  a list  of  the  govern- 
ments to  which  it  was  sent. 

Mr.  Williams.  It  is  a Senate  document  ? 

Mr.  Lightfoot.  You  can  call  for  the  same  papers  and  find  in  their 
list  where  they  had  franked  out  these  documents  from  their  own  office 
to  Argentina  and  all  South  American  countries  where  we  had  estab- 
lished plants.  They  had  franked  out  these  reports  to  those  countries. 

In  fairness  I want  to  state  that  some  of  these  reports  were  sent 
upon  request.  After  it  was  published  in  the  newspapers,  the  Federal 
Trade  Commission,  no  doubt  received  requests  for  this  report,  and 
in  response  to  those  requests  they  sent  them  out.  Of  course  they 
could  not  be  blamed  for  transmitting  to  any  country  a copy  of  this 
report  where  they  had  received  a request  for  a copy  of  same.  But  it 
is  very  apparent  from  the  letter  it  was  a voluntary  act  on  the  part  of 
the  Federal  Trade  Commission  in  transmitting  to  the  Secretary  of 
State  those  copies  to  be  sent  to  all  the  countries  of  the  world. 

Mr.  Tincher.  Under  all  the  circumstances  don’t  you  think  it 
would  be  important  to  the  whole  industry  if  we  could  pass  a law 
pretty  quickly  putting  you  under  the  jurisdiction  of  the  Secretary  of 
Agriculture  or  some  place  where  you  would  not  be  unjustly  treated? 

Mr.  Lightfoot.  Acting  on  the  suggestion  that  some  members 
made  to-day,  there  may  be  some  suggestions  made  along  that  line 
before  you  get  through. 

Mr.  Gernerd.  I think  something  of  that  kind  ought  to  be  done 
after  all  of  this. 

Mr.  Lightfoot.  Let  me  make  this  one  observation  right  here  in  all 
seriousness.  The  question  has  often  been  asked:  Why  are  the  pack- 
ers down  here  fighting  this  legislation  ? Bills  have  been  offered  on 
the  idea  that  we  are  a monopoly.  If  you  pass  a resolution  with  that 
theory  in  your  mind  it  will  be  evidence  to  all  foreign  countries  where 
we  are  trying  to  do  business  and  find  an  outlet  for  the  products  of  the 
farms  of  this  country,  that  the  allegations  made  by  the  Federal  Trade 
Commission  are  true;  and  if  the  Congress  of  the  United  States,  the 
highest  legislative  body  in  this  country,  acting  upon  such  authority, 
passed  legislation  to  that  effect,  it  would  lend  color  to  the  charge.  I 
think  you  would  certainly  be  lending  color  to  that  charge. 

Mr.  Tincher.  I think  you  made  an  awful  mistake  in  agreeing  to  the 
consent  decree  instead  oi  coming  to  Congress. 

Mr.  Lightfoot.  The  consent  decree  had  nothing  to  do  with 
legislation. 

Mr.  Tincher.  You  went  into  the  consent  decree  by  which  you 
eliminated  yourself  from  certain  lines  of  business.  I suppose  you 
have  agreed  to  do  certain  things  that  it  is  absolutely  impossible  to  do. 


MEAT  PACKER.  375 

Mr.  Lightfoot.  That  was  done,  as  I told  you  before,  purely  to 
meet  this  public  sentiment  which  had  been  created  against  us  in 
our  own  country.  It  was  done  in  good  faith  on  our  part,  and  we 
had  some  hope  that  it  might  satisfy  the  people  of  our  country  that 
we  had  no  desire  to  secure  a monopoly  over  the  breakfast  table  of 
the  American  people.  That  was  the  only  reason.  The  Attorney 
General  could  have  brought  a suit  if  he  had  evidence  against  us,  and 
we  would  have  taken  our  chances  on  that.  But  we  do  not  get 
credit  for  what  we  have  done.  In  fact,  in  the  place  of  getting 
credit  for  good  intentions  and  an  attempt  to  meet  public  sentiment, 
nine  people  out  of  ten  think  we  were  guilty. 

Mr.  Kincheloe.  I think  you  are  right  about  that. 

Mr.  Voigt.  In  connection  with  your  statement  and  Mr.  Veeder’s 
statement  that  you  were  so  willing  to  be  investigated,  I think  it  is 
only  fair  to  read  the  third  paragraph  from  a letter  of  the  Federal 
Trade  Commission  dated  July  3,  1918,  which  they  sent  to  the  Presi- 
dent transmitting  the  report: 

The  commission,  through  Mr.  Heney,  had  to  meet  deliberate  falsification  of  returns 
properly  required  under  legal  authority;  we  had  to  meet  schools  for  witnesses  where 
employees  were  coached  in  anticipation  of  their  being  called  to  testify  in  an  investi- 
gation ordered  by  you  and  by  the  Congress  of  the  United  States;  we  had  to  meet  a 
situation  created  by  the  destruction  of  letters  and  documents  vital  to  this  investi- 
gation; we  had  to  meet  a conspiracy  in  the  preparation  of  answers  to  the  lawful 
inquiries  of  the  commission. 

It  does  not  seem  to  me  that  these  commissioners  all  signing  this 
report  would  willfully  and  wrongfully  make  that  sort  of  statement 
in  a report  to  the  President,  not  unless  there  was  something  to 
back  it  up. 

Mr.  Lightfoot.  Now,  that  is  logical,  and  I can  see  why  you  or 
any  other  man  would  take  that  view.  Let  me  explain  just  one  of 
those  statements.  What  was  the  last  one  ? 

Mr.  Voigt.  The  last  portion  of  that  paragraph  was : 

We  had  to  meet  a conspiracy  in  the  preparation  of  answers  to  the  lawful  inquiries 
of  the  commission. 

Mr.  Lightfoot.  You  would  gather  from  that  that  we  had  gotten 
together  in  order  to  make  an  improper  answer. 

Mr.  Voigt.  I think  there  is  a copy  of  a letter  here  that  proves 
that  allegation.  Let  me  read  a letter  on  page  29  of  this  summary 
and  part  1.  There  we  find  a letter  dated  August  2,  1917.  That 
letter  is  addressed  to  Mr.  G.  F.  Swift,  jr.,  and  several  other  gentle- 
men: 

Mr.  Veeder  informs  me  that  he  has  at  different  times  talked  to  Messrs.  Thomas 
E.  Wilson,  M.  W.  Borders,  C.  J.  Faulkner,  James  Sheehan  (retained  by  Armour  & 
Co.  for  this  investigation),  and  Thomas  Creigh,  and  has  suggested  to  them  that  each 
firm  prepare  its  own  answer  to  the  questionnaire  received  recently  from  Commis- 
sioner Davies  and  that  when  the  answers  had  been  completed  we  have  a conference 
for  the  purpose  of  discussing  objectionable  things,  if  any,  which  might  be  contained 
in  the  individual  reports. 

What  is  your  impression  from  that  ? 

Mr.  Creigh.  Let  me  tell  you  about  that. 

Mr.  Lightfoot.  No;  let  me  answer  that  first. 

Mr.  Creigh.  Here  are  the  four  questions. 

Mr.  Lightfoot.  I want  to  test  this  out. 

Mr.  Voigt.  I take  it  from  this  letter  that  you  gentlemen  had 
received  a questionnaire  from  the  Federal  Trade  Commission,  and 


376 


MEAT  PACKER. 


that  after  this  questionnaire  arrived  Mr.  Veeder  suggested  to  the 
various  gentlemen  interested  that  they  fill  out  their  questionnaires 
and  have  a little  private  meeting,  as  he  says: 

For  the  purpose  of  discussing  objectionable  things,  if  any,  which  might  be  contained 
in  the  individual  reports. 

In  other  words,  if  any  of  you  made  an  honest  report  and  after 
getting  together  you  thought  there  was  anything  objectionable  in 
that  report,  you  would  iron  it  out.  I do  not  consider  that  a proper 
procedure. 

Mr.  Lightfoot.  That  is  the  natural  conclusion  any  individual 
citizen  would  draw,  and  I do  not  blame  you  for  having  that  idea  in 
your  mind.  I am  not  criticizing  you  for  that  view,  but  let  me  state 
the  facts:  When  the  President  ordered  the  Federal  Trade  Com- 
mission to  make  an  investigation  of  the  packers  the  chairman  came 
to  Chicago  and  called  a meeting  of  the  packers  to  consider  in  what 
way  they  could  best  proceed  under  this  request  of  the  President  to 
make  an  investigation  of  the  packing  industry.  They  had  with  them 
some  members  of  the  committee  on  markets  of  the  American  National 
Live  Stock  Association,  who  had  started  the  agitation  that  led  up 
to  this  investigation.  They  were  in  one  room  and  the  packers  were 
in  another.  They  did  not  bring  them  all  together  to  confer  on  this 
matter.  But  they  would  go  over  and  confer  with  them  and  then 
come  and  confer  with  the  packers.  After  asking  the  packers  for 
their  opinion  on  that  they  submitted  four  questions  for  answer. 
They  called  all  the  packers  together  in  joint  meeting  to  propound 
those  questions  to  them,  to  consider  how  they  would  divide  up  the 
work,  etc.,  who  was  to  investigate  the  packers,  and  who  the  producers 
and  who  the  consumers.  These  are  the  questions: 

(1)  As  you  are  aware,  there  is  widespread  complaint  among  consumers  as  to  the 
prices  of  all  meats  and  other  animal  food  products.  The  commission  would  like  your 
views  as  to  the  cause  of  present  high  prices,  to  what  extent  they  are  justified,  and  if 
in  your  judgment  there  is  not  complete  justification  for  them,  what  factor  or  factors 
in  the  production  of  meat  animals  and  their  products  can  be  justly  criticized? 

(2)  T he  meat  packer  stands  between  the  producer  of  meat  animals  on  the  one  hand, 
and  the  retail  distributor  of  their  products  on  the  other.  In  what  respect,  if  any, 
does  either  of  these  three  agencies,  in  your  opinion,  fail  to  perform  its  proper  function 
in  serving  the  ultimate  consumer? 

(3)  In  your  opinion  is  the  present  vast  system  of  conducting  the  meat  business  from 
the  raising  of  the  animals  on  the  range  and  farm  through  all  the  steps  to  the  table  of 
the  consumer  the  result  of  the  operation  of  healthy,  natural  laws  or  is  it  in  part  the 
result  of 'efforts,  either  conscious  or  unconscious,  to  interfere  with  the  operation  of 
such  laws? 

(4)  What,  if  any,  are  the  economic  weaknesses  of  the  existing  system,  and  what 
remedies  do  you  suggest  for  any  existing  evil? 

Those  are  the  four  questions  that  he  submitted  to  the  joint  meeting 
of  all  the  packers,  called  by  him  for  the  purpose  of  eliciting  that 
information  for  use  in  their  investigation. 

What  did  Mr.  Traynor  say  ? He  wrote  a letter  to  Mr.  Swift  and 
various  other  persons,  to  his  own  people,  mind  you,  and  not  to  other 
packers.  He  said: 

Mr.  Veeder  informs  me  that  he  has,  at  different  times,  talked  to  Messrs.  Thomas  E. 
Wilson,  M.  W.  Borders,  C.  J.  Faulker,  James  Sheehan  (retained  by  Armour  & Co. 
for  this  investigation),  and  Thomas  Creigh  and  has  suggested  to  them  that  each  firm 
prepare  its  own  answer  to  the  questionnaire  received  recently  from  Commissioner 
Davis  and  that  when  the  answers  have  been  completed  we  have  a conference  for  the 
purpose  of  discussing  objectionable  things,  if  any,  which  might  be  contained  in  the 
individual  reports. 


MEAT  PACKER. 


377 


That  was  merely  to  compare  experiences  of  all  those  packers  under 
these  questions  submitted  to  him.  It  was  not  intended  to  conceal 
anything,  but  to  see  that  their  data,  their  experience,  their  statistics, 
corresponded  in  order  that  the  Government  could  rely  upon  the  truth 
of  the  facts  that  we  were  to  give  them.  That  is  what  they  say 
about  it. 

Mr.  Voigt.  I do  not  think  you  have  changed  my  mind  about  that. 

Mr.  Lightfoot.  May  be  not,  but  I am  not  quite  through  with  it  yet. 

Mr.  Voigt.  Each  one  of  you  was  sent  a questionnaire  ? 

Mr.  Lightfoot.  Each  one  was  sent  a questionnaire  which  involved 
economic  questions.  I want  to  show  you  what  they  did.  We  would 
have  had  the  right  to  sit  in  conference  and  to  have  discussed  over  the 
table  all  the  things  Mr.  Veeder  suggests  in  his  letter,  because  we  were 
called  together  jointly  for  that  purpose. 

Mr.  Voigt.  Right  there:  Was  this  questionnaire  handed  to  you  at 
this  conference  or  sent  to  you  by  mail  ? 

Mr.  Lightfoot.  Well,  I was  not  present,  and  I do  not  know. 

Mr.  Creigh.  At  the  conference  it  was  agreed  that  the  questions 
would  be  sent  later  by  mail,  which  was  done. 

Mr.  Lightfoot.  I want  to  call  attention  to  this  fact,  that  the 
Federal  Trade  Commission  in  the  summary  of  its  report  that  you  have 
there  shows  the  fact  that  we  met  to  answer  these  questions  as  a cir- 
cumstance to  prove  a 11  combination”  between  these  packers  in  viola- 
tion of  law. 

Mr.  Voigt.  It  does  show  that  you  were  pretty  closely  allied  when 
you  get  together  to  answer  those  questions.  But  what  the  Federal 
Trade  Commission  wanted  when  it  sent  out  that  questionnaire  was  the 
individual  experience  and  observation  and  information  from  the 
people  to  whom  the  questionnaire  was  sent.  And  this  letter  states 
that  the  proposition  was  that  you  should  all  get  together  before  you 
answered  that  questionnaire  in  order  to  remove  anything  that  might 
be  objectionable  in  any  of  your  answers. 

Mr.  Creigh.  On  the  other  hand,  the  letter  says  get  together  after 
the  answers  were  prepared  and  check  them  up.  I will  say  that  as  far 
as  the  answer  for  Cudahy  is  concerned  we  had  no  help  in  getting  it  up. 
Before  I got  this  paper  printed  which  Gen.  Lightfoot  has  in  his  hand 
I came  down  to  the  Federal  Trade  Commission  and  I said: 

The  packers  want  to  get  publicity  and  have  the  people  understand  something  about 
the  business.  This  may  be  of  some  benefit.  Do  you  mind  our  having  it  gotten  out 
by  the  thousands  and  send  it  out  for  publicity. 

I am  proud  of  that  record. 

Mr.  Veeder.  These  questions  asked  for  opinions  on  matters  of 
political  economy.  The  purpose  of  that  was  that  we  should  discuss 
the  various  phases  of  the  business  and  economic  situation,  and  all  that 
was  meant  to  do  was  to  point  out  economic  conditions.  There  was  a 
great  chance  for  wide  variance  of  opinion,  and  we  wanted  to  have  this 
understandable  by  and  of  benefit  to  the  Federal  Trade  Commission. 

Mr.  Voigt.  And  that  was  just  what  the  Federal  Trade  Commisison 
did  not  want;  they  wanted  your  individual  opinions. 

Mr.  Veeder.  I take  it  they  wanted  our  best  judgment.  The  law- 
yers thought  we  could  get  better  results  if  we  each  wrote  out  our 
independent  judgment,  and  from  the  judgment  of  the  five  take  the 
best  judgment  as  to  the  economic  situation.  We  got  together  at  the 
request  of  the  secretary  of  the  committee  and  we  were  working  it  out 
to  the  best  advantage. 


378 


MEAT  PACKER. 


Mr.  Kincheloe.  Were  your  answers  very  much  alike  to  those 
questions  ? 

Mr.  Veeder.  They  were  quite  similar.  As  a matter  of  fact,  I do 
not  think  we  ever  got  together  and  worked  it  out.  After  each  wrote 
up  his  answer  we  exchanged  them,  but  I do  not  think  we  ever  changed 
them. 

Mr.  Kincheloe.  They  were  sent  in  without  being  changed? 

Mr.  Veeder.  Without  being  materially  changed. 

Mr.  Lightfoot.  The  fourth  question  is:  “What,  if  any,  are  the 
economic  weaknesses  of  the  existing  system,  and  what  remedies  do 
you  suggest  for  any  existing  evils?” 

I can  not  imagine  how  it  would  be  evidence  of  a conspiracy  in 
restraint  of  trade  and  a circumstance  to  prove  a monopoly  if  all  the 
packers  met  every  day  in  the  week  to  discuss  that  question  and  should 
come  to  the  same  conclusion  on  it.  But  the  Federal  Trade  Commis- 
sion said  because  we  did  do  that,  in  response  even  to  a movement 
initiated  by  the  chairman  of  the  commission  himself,  it  was  one 
circumstance  relied  upon  to  convict  us  of  a monopoly.  And  that  is 
why  the  Congress  now  is  being  called  upon  to  legislate — because  we 
are  a monopoly,  for  the  Federal  Trade  Commission  says  we  are. 
And  that  is  the  only  excuse  for  the  legislation  asked  for.  Senator 
Kenyon,  one  of  the  most  active  Senators  who  has  been  behind  this 
thing,  says  that  that  is  the  only  excuse  for  it.  If  there  is  no  monopoly 
in  this  industry,  then  the  whole  reason  for  the  law  fails. 

Mr.  Tincher.  You  gentlemen  have  cooperated  together  leading 
up  to  this  matter,  and  had  fought  hard  a resolution  that  was  offered 
in  the  Congress  long  before  I came  here — the  Borland  resolution. 
You  had  kind  of  let  the  people  of  the  country  think  by  that  fight — and 
I was  nothing  but  a layman  and  I know  what  I thought — and  the 
correspondence  that  was  subsequently  published  showed  how  you 
fought  that  investigation 

Mr.  Lightfoot  (interposing).  Do  you  know  why  that  resolution 
was  fought  ? Do  you  know  that  that  resolution  was  predicated  upon 
the  charge,  or  set  forth  the  charge,  that  we  were  a trust,  a monopoly  ? 
Therefore  we  were 

Mr.  Tincher  (interposing).  Why  didn’t  you  say  you  were  not, 
but  that  you  were  willing  to  go  in  and  be  investigated  ? 

Mr.  Veeder.  There  was  that  resolution  and  there  were  several 
of  them.  Each  one  in  turn  charged  that  the  packers,  naming  Ar- 
mour & Co.  and  Swift  & Co.,  and  so  on,  were  violating  antitrust  laws 
and  the  resolution  was  that  they  should  be  investigated.  While 
this  very  resolution  was  pending  in  the  Congress  I went  to  Mr. 
Hurley  and  said  to  him: 

These  resolutions  are  pending,  and  the  possibility  is  that  sooner  or  later  your  com- 
mission will  be  asked  by  the  Congress  to  make  an  investigation.  I want  to  say  to 
you  right  now  we  are  not  objecting  to  any  investigation  by  you,  but  we  are  objecting 
to  being  named  in  a resolution  before  the  Congress  before  a word  of  evidence  has  been 
taken  as  being  violators  of  the  law. 

Mr.  Tincher.  I have  examined  all  the  correspondence  I can  find 
about  the  fight  on  the  Borland  resolution.  There  is  no  reference 
in  any  letter  that  I can  find  of  any  objection  to  the  language  con- 
tained in  the  Borland  resolution. 

Mr.  Veeder.  I think  there  are  some  that  are  not  in  that  printed 
book.  We  fought  that  resolution  as  hard  as  we  could  because  we 


MEAT  PACKER. 


379 


did  not  want  a resolution  passed  charging  us  in  advance  with  being 
criminals.  But  here  is  what  we  did.  We  invited  the  markets 
committee  of  the  Texas  Live  Stock  Association,  which  was  back 
of  this  resolution,  to  meet  us  in  Chicago.  They  met  us  in  the  office 
of  Swift  & Co.  There  was  Mr.  Lasater,  and  Mr.  Heard,  and  Senator 
Kendrick,  and  Mr.  Burke,  and  all  of  them.  Then  there  was  Mr. 
Borders,  Mr.  Wilson,  Mr.  Swift,  and  Mr.  Walter  Fisher,  the  attor- 
ney for  the  markets  committee. 

We  discussed  this  matter.  We  told  them  we  had  no  objection 
to  an  investigation,  but  we  thought  there  ought  to  be  an  investiga- 
tion which  would  take  into  consideration  the  animal  from  the  pro- 
ducer to  the  consumer;  that  we  would  help  them  to  put  some  such 
resolution  through.  They  agreed,  and  they  themselves  drew  the 
resolution  to  which  we  consented.  That  resolution  was  to  be  in- 
troduced into  the  Congress,  providing  for  an  economic  investiga- 
tion of  the  industry,  with  the  understanding  that  if  the  evidence 
showed  anybody  had  violated  the  law,  such  investigation  would 
not  be  considered  an  immunity  from  prosecution.  And  the  packers 
said  they  would  expect  to  be  prosecuted  if  it  was  found  they  had 
violated  the  law.  It  was  agreed  that  the  investigation  should  be 
made  from  beginning  to  end  of  the  industry,  and  that  Walter  Fisher 
should  draw  the  resolution 

The  very  next  day  after  making  that  agreement,  which  they 
themselves  drew,  they  got  together  on  the  Borland  resolution  in 
Washington,  in  which  it  was  charged  that  the  packers,  naming  them, 
had  violated  the  law.  We  did  not  oppose  that  resolution  except  for 
the  reason  that  it  charged  us  in  advance  of  violating  the  law;  and 
we  had  told  them  we  would  help  them  to  get  a resolution  which  did 
not  contain  such  a charge  but  provided  for  an  investigation  of  the  sub- 
ject from  start  to  finish. 

Mr.  Voigt.  Did  you  ever  suggest  to  Mr.  Borland  that  if  he  would 
change  the  form  of  his  resolution  you  would  favor  it  ? 

Mr.  Veeder.  We  told  that  here. 

Mr.  Voigt.  Did  you  ever  say  it  to  Mr.  Borland  ? 

Mr.  Creigh.  I said  then,  six  or  seven  years  ago,  how  I felt. 

Mr.  Veeder.  Mr.  Kendrick  and  Mr.  Lasater,  and  Mr.  Burke  and 
Gov.  Stubbs  and  no  end  of  people  were  there,  and  Mr.  Mercer  was 
there.  They  know  what  we  said. 

Mr.  Tincher.  At  that  time  I was  living  out  in  Kansas  and  I know 
the  thoughts  of  the  stockmen,  and  I know  we  thought  it  was  awfully 
funny  that  you  went  to  the  extent  you  did  against  that  resolution. 

Mr.  Veeder.  Mr.  Mercer  has  a copy  of  that  agreement,  because  he 
showed  it  to  me  the  last  time  I was  here. 

Mr.  Tincher.  Of  course,  you  could  not  be  convicted  of  any  crime 
by  congressional  resolution. 

Mr.  Veeder.  We  were  convicted  before  there  was  an  investigation. 
We  were  so  charged  in  the  resolution.  It  is  in  your  records,  as  I 
introduced  it  in  the  Senate  hearings  and  you  can  find  it  there. 

Mr.  Voigt.  On  page  30  of  summary  and  part  1 of  the  report  of  the 
Federal  Trade  Commission  I find  this — 

In  addition  to  the  general  “ combing’ ’ of  the  companies’  files  in  anticipation  of  the 
investigation,  attempts  were  made  on  certain  occasions  to  abstract  important  docu- 
ments from  the  files  under  the  eyes  of  our  agents.  G.  S.  Sheppard,  vice  president  of 


380 


MEAT  PACKER. 


the  Cudahy  Tacking  Co.,  admitted  that  he  had  ordered  his  stenographer  to  make  an 
incorrect  copy  of  a letter  which  the  commission ’s  agent  had  requested  and  had  him- 
self destroyed  the  document. 

Mr.  Creigh.  May  I state  the  facts  about  that  ? 

Mr.  Voigt.  Certainly,  if  you  know. 

Mr.  Creigh.  I was  there  at  the  time.  The  examiner  came  and 
asked  for  the  letter.  In  that  letter  there  was  something  reflecting 
upon  a man’s  personal  character.  I said — 

That  has  nothing  to  do  with  the  matter,  and  if  you  have  no  objection  we  will  cut 
that  out. 

He  said  that  was  all  right  to  cut  it  out. 

Mr.  Ten  Eyck.  I now  wish  to  offer  this  motion:  That  the  chair- 
man call  a representative  of  the  Federal  Trade  Commission  before 
this  committee  before  closing  the  hearings,  to  advise  whether  or  not 
they  sent  their  report  of  the  so-called  packers’  investigation  through 
the  Secretary  of  State  or  otherwise  to  foreign  countries;  and,  if  so,  to 
advise  the  reason  for  so  doing. 

Mr.  Clarke.  I second  that  motion. 

Mr.  Tincher.  Well,  now,  let  us  not  confine  it  to  that  request. 
Let  us  have  a representative  of  the  Federal  Trade  Commission  come 
down  here  to  answer  all  the  questions  we  may  want  to  ask  him. 

Mr.  Ten  Eyck.  That  is  all  right.  But  we  want  him  to  come  down 
here  to  answer  about  this  particular  thing. 

Mr.  Gernerd.  I join  you  in  that. 

The  Chairman.  It  will  be  for  the  commission  to  determine  who 
they  will  send. 

Mr.  Ten  Eyck.  We  want  a member  of  the  commission  who  was 
there  at  the  time  and  who  can  tell  us  the  facts  about  it. 

The  Chairman.  Is  that  an  invitation  or  a summons  ? 

Mr.  Ten  Eyck.  It  can  be  taken  as  an  invitation,  but  we  mean  it 
to  have  the  strength  of  a summons.  We  expect  a man  to  come  here 
who  can  tell  us  about  this. 

Mr.  McLaughlin  of  Nebraska.  Of  course,  the  Federal  Trade  Com- 
mission will  be  heard  as  they  were  before.  I have  been  going  through 
about  200  pages  of  Mr.  Colver’s  testimony,  and  if  the  new  members 
of  this  committee  will  take  the  pains  to  read  that  it  will  be  seen  that 
these  very  questions  were  asked  Mr.  Colver  in  the  former  hearings, 
and  he  has  some  statements  in  there  about  it.  Before  we  pass  a 
specific  request  of  that  kind  I think  we  better  go  through  the  former 
report  and  see  what  he  says. 

Mr.  Ten  Eyck.  I do  not  want  somebody  to  say  what  somebody 
else  has  said.  Let  us  hear  him  now. 

Mr.  Jones.  Might  they  not  think  it  was  some  other  report.  Hadn’t 
you  better  make  your  motion  a little  more  specific  ? 

Mr.  Ten  Eyck.  Mr.  Lightfoot,  how  should  it  be  specified  ? 

Mr.  Lightfoot.  Ask  them  to  bring  a copy  of  a letter  which  they 
wrote  to  the  Secretary  of  State  of  the  United  States,  asking  him  to 
transmit  to  the  King  of  Belgium,  and  the  Queen  of  Holland  and  the 
King  of  England  and  the  President  of  Switzerland,  and  the  President 
of  Argentine,  and  so  on,  this  report. 

Mr.  Ten  Eyck.  I want  to  find  out  where  that  report  was  sent. 
If  they  asked  the  Secretary  of  State  to  send  it  and  it  was  not  sent  I 
would  like  to  know  that  fact. 

Mr.  Jones.  I would  like  to  know  about  that  letter,  too. 


MEAT  PACKER. 


381 


Mr.  Lightfoot.  Suppose  you  ask  him  to  bring  a copy  of  the  form 
letter  that  they  inclosed  with  the  report  to  the  Secretary  of  State. 

Mr.  Tincher.  Can  we  hear  them  to-morrow  afternoon  ? 

The  Chairman.  We  will  have  to  hear  them  whenever  they  can 
come. 

Mr.  Tincher.  Oh;  no.  We  want  to  close  these  hearings  as  per 
our  schedule. 

The  Chairman.  Are  you  ready  for  the  question  ? [The  question 
was  called  for  and  unanimously  carried.] 

Mr.  Rogers,  after  this  brief  interruption,  you  may  continue. 

Mr.  Rogers.  I want  to  apologize  for  taking  up  so  much  of  your 
time  with  irrelevant  matters.  I believe  I have  nothing  further  to 
say  unless  you  have  some  questions  to  ask. 

Mr.  Creigh.  Will  you  hear  Mr.  Mayer  ? 

The  Chairman.  We  will  hear  Mr.  Mayer  next. 

STATEMENT  OF  MR.  OSCAR  G.  MAYER,  SECRETARY  AND 

GENERAL  MANAGER  OF  OSCAR  MAYER  & CO.,  CHICAGO, 

ILL. 

Mr.  Mayer.  Mr.  Chairman  and  gentlemen  of  the  committee,  I am 
secretary  and  general  manager  of  Oscar  Mayer  & Co.,  a compara- 
tively small  packing  concern  with  plants  located  at  Chicago,  111., 
and  Madison,  Wis.  Our  business  was  founded  about  36  years  ago 
by  my  father,  who  is  still  active  in  the  business,  and  was  founded 
primarily  as  a distributing  business  supplying  the  smaller  retail 
merchants  and  delicatessen  concerns  in  and  about  Chicago  with  their 
meat  products.  We  give  them  a very  close  business  service. 

Our  plant  is  not  located  in  the  stockyards  there  but  on  the  north 
side  of  the  city,  and  our  hogs  are  slaughtered  for  us  in  the  stockyards 
by  a company  in  which  we  have  an  interest. 

Up  to  about  two  years  ago  we  had  only  the  Chicago  plant.  But 
at  that  time  we  purchased  this  plant  at  Madison,  from  a defunct 
cooperative  concern,  and  have  been  operating  it  since  on  a more  or 
less  independent  basis.  That  is,  we  try  to  market  as  much  of  the 
products  of  that  plant  directly  out  of  Madison  as  we  can,  and  maintain 
our  source  of  supply  in  Chicago  as  it  has  been. 

Our  business  amounts  to  between  $10,000,000  and  $12,000,000  a 
year,  and  of  course  as  you  can  see  is  distinctly  smaller  than  that  of 
Mr.  Hormel’s  or  Mr.  Taliaferro’s  who  testified  here  on  yesterday. 

We  gather  our  hogs  for  the  Madison  plant  from  the  surrounding 
territory,  and  only  at  times  when  we  see  a shortage  do  we  go  to  out- 
side markets,  in  which  case  we  generally  go  to  Sioux  City  or  to  St. 
Paul.  We  have  not  had  to  do  that  very  much. 

We  also  lease  a few  refrigerator  cars,  only  10.  We  have  found 
those  10  to  be  mightly  valuable  to  us. 

I know  our  business,  distributing  and  general  packing  business  as 
we  conduct  it,  and  feel  that  I know  it  fairly  and  thoroughly.  I also 
feel  that  through  12  years’  experience  and  having  been  associated 
with  the  business  since  childhood,  I have  acquired  a general  knowledge 
of  the  business,  and  it  is  in  that  sense  that  I am  here  and  trying  to 
tell  you  the  lines  along  which  I think  the  packing  business  should 
be  conducted. 


382 


MEAT  PACKER. 


You  must  remember  that  the  packers,  being  between  6,000,000 
producers  on  the  one  hand  and  100,000,000  consumers  on  the  other, 
are  between  the  upper  and  nether  millstones  in  the  matter  of  any 
fluctuation.  Of  course  the  consumers  want  to  get  the  product  as 
low  as  they  can,  and  the  producers  want  to  get  every  cent  out  of  the 
stuff  they  can. 

The  fact  that  we  are  in  that  situation  always  permits  of  an  exag- 
gerated opinion  of  the  abuses  which  the  packer  is  committing,  and 
you  gentlemen  of  the  committee  should  not  overlook  that  fact. 
You  should  not  overlook  the  fact  either  that  because  we  are  under 
such  constant  scrutiny  on  all  sides  that  it  is  one  of  the  best  automatic 
checks  on  abuses  that  any  industry  could  possibly  have.  For  the 
purpose  of  presenting  this  matter  1 have  started  with  the  question 
as  to  when  an  industry  needs  repressive  regulation.  I have  named 
four  premises. 

An  industry  needs  repressive  regulation  if  (1)  its  profits  are  exces- 
sive, (2)  if  it  is  monopolistic — that  is,  controls  prices  or  stifles  com- 
petition, (3)  contains  corrupt  practices,  (4)  serves  the  public  poorly. 

Now,  let  us  examine  these  propositions:  As  to  the  profits  of  the 
packing  business,  everybody  has  been  thoroughly  imbued  with  the 
idea  that  packing-house  profits  are  immense.  They  run  from 
nothing  up  to  3 cents  on  a dollar  of  sales.  During  the  12  years  I have 
been  acquainted  with  the  business  they  have  ranged  from  one-third 
of  1 cent  to  a maximum  of  3 cents  on  a dollar  of  sales,  with  an  aver- 
age of  about  2 cents  on  a dollar  of  sales  covering  the  12  years.  It  is 
a well-known  fact,  and  I suppose  it  has  been  brought  out  in  this  com- 
mittee time  and  again,  that  for  the  last  25  years  the  average  profit 
in  the  packing-house  business  has  been  2\  cents  on  the  dollar  of  sales. 

Mr.  Clarke.  How  many  turnovers  would  that  be  in  a year  ? 

Mr.  Mayer.  Of  course  the  turnover  in  the  packing  business  is 
dependent  upon  the  marketing  policy  a plant  is  following.  In  our 
own  business  we  turn  over  our  stock  pretty  rapidly — from  10  to  14 
times  a }^ear. 

Mr.  Williams.  You  mean  2 per  cent  is  the  whole  profit  on  the 
volume  of  business  ? 

Mr.  Mayer.  Two  cents  on  each  dollar  of  sales.  Our  net  profit  for 
the  period  of  12  years  has  been  2 cents  on  each  dollar  of  sales. 

Mr.  Tincher.  With  an  average  turnover  of  14  times  a year  ? 

Mr.  Williams.  You  said  you  had  a business  of  about  $10,000,000. 
What  is  your  profit  ? 

Mr.  Mayer.  About  $200,000.  Our  business  has  not  been 
$10,000,000  for  all  of  that  time.  Our  profits  would  be  about  $200,000 
a year  if  we  did  $10,000,000  a year  in  business. 

Mr.  Williams.  Net  profits? 

Mr.  Mayer.  Before  dividends  and  taxes. 

Mr.  Tincher.  Two  cents  on  each  dollar  of  sales  ? 

Mr.  Mayer.  Yes,  sir. 

Mr.  Tincher.  If  your  capital  has  been  $10,000,000  and  you  have 
made  2 cents  on  each  dollar 

Mr.  Mayer  (interposing).  Our  inventory  runs  around  $800,000, 
and  if  we  do  a business  of  $8,000,000  a year,  that  means  that  we  turn 
our  inventory  over  10  times.  Inventory  versus  sales. 

Mr.  Tincher.  You  must  have  made  about  $2,000,000. 


MEAT  PACKER. 


383 


Mr.  Mayer.  Oh,  no.  It  is  about  $200,000.  I turn  my  inventory 
over  about  14  times. 

Mr.  Gernerd.  He  makes  $200,000  on  an  invested  capital  of 
$800,000. 

Mr.  Tincher.  I would  like  for  him  to  tell  me  how  he  does  it.  You 
say  you  make  2 cents  on  each  dollar  of  sales? 

Mr.  Mayer.  My  sales  are  around  $10,000,000. 

Mr.  Tincher.  And  you  turn  your  stock  over  fourteen  times  ? 

Mr.  Mayer.  Yes,  sir.  That  depends  on  how  much  stock  I carry. 
Our  inventory  is  around  $800,000. 

Mr.  Tincher.  That  furnishes  me  all  the  information  I want. 
I can  figure  it  out.  I can  tell  how  much  profit  you  make  on  your 
stock,  and  I can  do  that  just  as  well  as  I would  from  a hardware 
store.  If  I make  2 cents  on  a dollar  of  sales  and  turn  it  over  fourteen 
times  I know  what  it  is. 

Mr.  Mayer.  You  can  not  figure  anything  more  than  that  I turn 
my  inventory  over  fourteen  times,  what  I had  in  my  house. 

Mr.  Tincher.  What  is  your  inventory  ? 

Mr.  Mayer.  Granting  that  my  inventory  is  $800,000  my  sales  are 
fourteen  times  that,  which  would  be  $11,200,000. 

Mr.  Tincher.  And  2 cents  on  that  would  be  what  ? 

Mr.  Mayer.  $224,000. 

Mr.  Tincher.  And  you  say  it  is  fourteen  times  $800,000. 

Mr.  Mayer.  Something  like  that. 

Mr.  Voigt.  What  is  the  use  of  going  into  a compilation  of  that 
kind.  The  question  is  what  is  the  capital  employed  in  your  business 
and  what  is  the  profit. 

Mr.  Mayer.  The  actual  capital  of  the  plants  is  $2,500,000,  and  if 
we  make  $200,000  it  is  8 per  cent  on  our  investment. 

Mr.  Voigt.  Why  not  say  instead  of  1 cent  or  2 cents  on  a dollar 
of  sales  that  it  means  8 per  cent  ? 

Mr.  Mayer.  Because  it  depends  on  whether  you  are  looking  at  it 
from  the  standpoint  of  the  consumer  or  of  the  stockholder. 

Mr.  Tincher.  I think  that  is  clear. 

Mr.  Veeder.  It  depends  up  on  the  way  you  are  looking  at  it. 
From  the  stockholder’s  standpoint  it  is  one  thing  and  from  the 
standpoint  of  the  buyer  of  meat  it  is  another.  From  the  standpoint 
of  the  buyer  of  meat  it  represents  a profit  of  2 cents  on  each  dollar 
of  sales.  From  the  standpoint  of  the  stockholder,  he  gets  8 per 
cent  on  his  investment. 

Mr.  Voigt.  I think  from  the  standpoint  of  the  buyer  of  meat 
you  are  right. 

Mr.  Mayer.  I am  trying  to  establish  that  the  profits  in  the  packing 
business  are  very  small.  I was  going  to  say  that  in  no  industry  in 
the  United  States  that  any  body  can  mention  does  it  take  so  little  in 
the  way  of  profit  from  the  public  for  its  services.  In  fact,  the  profit 
in  the  packing  business  is  such  that  it  has  absolutely  no  effect  upon 
the  selling  price  whatever.  It  is  so  small  that  it  is  negligible.  It 
has  been  computed  to  amount  to  only  5 cents  per  week  for  each 
family  of  five  in  the  United  States,  or  about  $2.60  a year.  So 
much  for  the  profit  of  the  packing  business. 

Second.  The  next  question  to  be  answered  is  whether  the  packing 
business  is  monopolistic.  Our  packing  business  involves  both  seals 
and  purchases,  of  course,  and  they  are  under  my  own  personal  obser- 


384 


MEAT  PACKER. 


vation.  There  is  no  stage  of  the  game  where  we  do  not  meet  the 
big  packers  in  all  sorts  of  intense  competition.  And  in  this  business 
it  is  certainly  a struggle,  if  there  ever  is  one,  in  the  way  of  the  survival 
of  the  fittest.  You  only  have  that  small  margin  of  profit;  that  is 
all  you  can  get;  and  if  you  are  not  very  careful  in  your  operation 
that  profit  soon  resolves  itself  into  a loss,  which  runs  up  with  sur- 
prising rapidity. 

No  industrial  man  in  the  country  will  sell  stock  at  a loss  quicker 
than  the  packer  will,  because  the  packer  has  to,  on  account  of  the  ex- 
treme perishability  of  his  product.  He  must  sell  it  at  a loss  if  neces- 
sary. He  is  not  in  a position  to  get  profit  for  his  stuff  if  his  markets 
are  not  right.  If  there  is  a glut,  or  if  he  has  bought  stuff  too  high, 
he  must  sell  that  stuff.  It  is  not  a question  of  whether  he  wants  to; 
we  packers  must  take  losses  constantly  and  depend  upon  the  balance 
of  the  business  throughout  the  year  to  pull  us  through.  And  we 
never  know  whether  it  will  pull  us  through  or  not. 

Now,  as  to  the  matter  of  the  buying  or  lack  of  competition  on  the 
buying  side.  As  a matter  of  fact,  the  competition  on  the  buying  side 
during  the  past  two  years  has  been  absolutely  ridiculous.  The  packers 
have  bid  for  stuff  to  keep  their  plants  going  and  without  knowing 
what  they  were  going  to  get  for  the  finished  product.  The  packers 
have  bid  for  the  stuff  on  the  theory  that  their  overhead  was  there 
and  had  to  be  met,  that  their  plants  had  to  be  kept  going,  and  with 
the  possibility  that  they  could  not  get  enough  for  the  products  to 
cover  cost  and  a profit.  There  is  no  packer  but  what  has  testified 
to  that  fact  by  the  large  losses  which  he  has  shown  in  his  schedule 
during  the  last  two  years. 

Far  from  there  being  any  collusion  to  suppress  live  stock  prices,  I 
know  the  history  of  the  packing  business  from  the  standpoint  of 
overbidding.  There  has  been  ridiculously  high  overbidding  as  com- 
pared to  what  the  packer  realized  later  on. 

Mr.  Williams.  Why  can  not  the  packer  get  more  for  his  product  ? 

Mr.  Mayer.  It  is  impossible  on  account  of  the  conditions  in  the 
selling  end.  The  packer  on  the  buying  side  has  ignored  his  sales 
end.  They  have  figured  that  they  could  sell  this  stuff  when  it 
became  cured  and  got  to  the  markets,  and  then  when  we  got  our 
stuff  on  the  market  we  found  it  was  not  salable  at  100  cents  on  the 
dollar.  The  sales  end  is  to  that  extent  distinct  from  the  other  end. 
It  takes  60  days  to  cure  a ham  and  30  days  to  cure  a belly,  and  so 
forth,  and  the  time  element  has  been  important  during  this  period 
of  deflation. 

There  is  another  erroneous  conception  along  the  line  of  the  pack- 
ing business  being  monopolistic.  That  is,  that  the  big  packers  con- 
trol 80  per  cent  of  the  business.  That  is  erroneous  from  start  to 
finish. 

Mr.  Voigt,  I would  like  for  you  to  hear  this.  The  big  packers 
actually  do  only  37  per  cent  of  the  meat-packing  business  of  this 
country;  that  was  the  record  in  1920  according  to  this  authorita- 
tive statement,  when  100,000,000  animals  were  slaughtered  in  the 
United  States. 

Mr.  Clarke.  This  is  all  business,  not  just  interstate  business? 

Mr.  Mayer.  Yes;  but  you  can  not  make  any  distinction  here 
between  interstate  and  intrastate  business,  for  the  reason  that  the 
packer  buys  his  stuff  and  when  he  buys  it  he  does  not  know  whether 


MEAT  PACKER. 


385 


he  is  going  to  sell  it  interstate  or  intrastate.  And  what  is  the  dif- 
ference whether  it  crosses  the  State  line  or  not?  You  must  take 
into  consideration  the  volume  of  business  done  here. 

Mr.  Veeder.  All  of  the  packers’  meat  is  sold  intrastate  except  a 
very  small  portion.  You  do  not  ask  when  you  buy  a steak  where  it 
came  from.  You  buy  the  steak  that  looks  good  to  you.  It  may  be 
from  a local  killer,  or  it  may  have  been  shipped  from  Chicago.  At 
any  rate,  the  local  killer  is  in  competition  in  the  market  the  same 
as  the  western  shipper. 

Mr.  Mayer.  The  total  number  of  animals  slaughtered  in  the  United 
States  in  1920  was  about  100,000,000,  of  which  the  large  packers 
only  slaughtered  37,000,000,  about  37  per  cent.  The  balance  were 
slaughtered  by  the  smaller  packers,  of  which  we  are  one,  and  by 
farm  slaughterers,  and  so  forth.  So  as  a matter  of  fact  there  is  no 
monopoly  on  the  part  of  the  big  packers  in  the  business.  And  I 
say  that  in  defense  of  ourselves,  because  it  would  certainly  be  a bad 
condition  if  the  five  big  packers  could  monopolize  this  business  and 
nobody  else  in  the  United  States  had  the  acumen  to  get  a little  of 
this  business  for  himself.  The  smaller  packers  are  in  the  field,  and 
can  take  the  field  at  any  time  against  the  big  packers.  I am  willing 
to  do  it  at  any  time.  Far  from  our  taking  a back  seat,  with  only 
14  per  cent  of  this  business,  we  are  here  to  say  we  are  doing,  outside 
of  what  the  country  slaughterer  is  doing,  all  of  this  work  except  the 
37  per  cent  that  the  five  big  packers  do. 

Mr.  Clarke.  What  is  the  source  of  those  figures  ? 

Mr.  Mayer.  The  Institute  of  American  Meat  Packers.  It  is  an 
institution  which  is  certainly  able  to  get  the  correct  figures. 

Mr.  Voigt.  What  figures  does  the  institute  give  on  the  interstate 
slaughter  ? 

Mr.  Mayer.  I have  not  the  figures  on  the  interstate  slaughter. 
What  do  you  mean  by  that  ? 

Mr.  Voigt.  I mean  the  slaughter  of  all  animals  that  have  passed 
into  interstate  commerce. 

Mr.  Mayer.  The  live  animals  that  have  been  shipped  across  the 
State  lines  ? 

Mr.  Voigt.  Yes,  and  that  are  handled  by  what  we  call  the  packer. 

Mr.  Mayer.  Well,  those  figures  of  course  I have  not  got.  I really 
do  not  consider  them  relevant  either  because  we  can  not  distinguish 
interstate  from  intrastate  volume  of  this  business. 

Mr.  Tincher.  Mr.  Chairman,  I see  these  lights  flickering.  Do  they 
go  out  at  12  o’clock? 

The  Chairman.  It  begins  to  look  like  it. 

Mr.  Voigt.  Take  the  man  who  slaughters  a hog  or  two.  All  of 
that  is  included  in  the  figures  you  have  ? 

Mr.  Mayer.  Yes. 

Mr.  Voigt.  The  hog  or  two  that  a man  slaughters,  and  of  course 
that  amounts  to  a great  many  thousands  in  the  aggregate,  those 
animals  do  not  enter  into  competition  with  the  animals  that  are 
handled  in  interstate  commerce.  That  is  the  difference  between  the 
total  slaughter  and  the  interstate  slaughter. 

Mr.  Veeder.  I respectfully  submit  that  is  not  correct.  That 
decreases  the  amount  of  cattle  that  will  be  bought  by  the  packer. 

46985—21 25 


386 


MEAT  PACKER. 


Mr.  Creigh.  Mr.  Taliaferro  testified  that  in  the  City  of  Detroit, 
which  is  now  a pretty  large  city,  62  per  cent  of  the  beef  sold  is  local 
kill. 

Mr.  Mayer.  If  they  are  slaughtered  on  the  farm  it  takes  that  much 
potential  volume  away  from  the  packers. 

Mr.  Voigt.  That  slaughter  has  really  a remote  effect  upon  com- 
petition. It  is  not  a direct  factor  in  the  competition  in  interstate 
traffic  in  slaughtered  animals  ? 

Mr.  Mayer.  Let  me  outline  a concrete  instance  in  your  own  State. 
In  our  plant  at  Madison,  Wis.,  we  started  two  years  ago  with  the  idea 
of  running  car  routes  to  distribute  the  products  in  the  surrounding 
territory.  We  have  been  forced  to  give  up  the  car-route  business 
for  the  reason  that  the  country  slaughter  in  and  around  Madison  was 
so  extensive  that  it  did  not  pay  us  to  operate  the  car  routes  out  of 
Madison. 

Mr.  Voigt.  You  get  into  small  communities  where  there  are 
country  slaughterers  ? 

Mr.  Mayer.  It  is  a very  large  area.  So  the  country  slaughterer 
does  compete  with  the  packing  house. 

Mr.  Tincher.  Do  you  know  why  the  country  slaughter  is  picking 
up  ? It  is  because  a man  can  killa  hog  and  then  get  more  out  of  the 
lard  than  out  of  the  whole  hog. 

Mr.  Mayer.  I have  taken  up  this  much  of  your  time  to  show  the 
committee  that  in  my  estimation  there  is  no  such  thing  as  a monopoly 
in  the  packing  business  at  the  present  time. 

Third.  The  next  division  of  this  question  is  whether  there  are 
corrupt  practices.  The  smaller  packers  have  never  been  accused 
of  any  corrupt  practices,  and  yet  they  are  all  included  in  this  proposed 
legislation,  some  of  which  is  of  very  drastic  character  and  a distinct 
reflection  and  humiliation  on  the  smaller  packers. 

Mr.  Clarke.  Do  you  think  the  smaller  packers  have  ever  indulged 
in  unfair  practices? 

Mr.  Mayer.  Not  to  my  knowledge. 

Mr.  Clarke.  Human  nature  is  pretty  much  the  same  the  world 
over. 

Mr.  Mayer.  From  my  observation  at  the  present  time,  and  going 
back  over  a period  of  12  years,  so  far  as  the  large  packers  are  con- 
cerned I have  never  seen  personally  nor  personally  experienced  any 
corrupt  practice  or  unfair  competition  from  them.  In  fact,  we  find 
in  our  business  that  the  large  packer  is  a distinct  advantage  to  us. 
In  the  first  place,  they  take  our  surplus  of  merchandise  at  times,  and 
our  lard,  and  our  bellies,  etc.  They  form  a reservoir  for  the  smaller 
packers,  just  as  they  form  a reservoir  for  the  farmers  and  raisers 
of  live  stock. 

On  the  other  hand,  they  have  always  sold  us  their  products,  and 
our  relations  have  been  very  intimate,  both  on  the  buying  and  the 
selling  side.  For  one  thing  we  feel  the  need  in  our  business  for  the 
larger  packer. 

As  to  the  refrigerator  cars,  the  idea  of  corrupt  practices  there  is 
absolutely  a myth.  I do  not  believe  the  time  will  ever  come  when 
the  railroad  companies  will  be  able  to  provide  refrigerator  cars  to  the 
packers  with  that  high  standard  of  sanitation  which,  in  the  first  place, 
the  Government  sets  up  these  days,  and  which,  in  the  second  place, 
the  packers  would  set  up  of  their  own  accord.  These  products  must 
be  handled  in  sanitary  cars.  We  can  not  afford  to  have  cars  carry 


MEAT  PACKER. 


387 


cheese  and  kerosene  and  come  back  to  us  for  the  carriage  of  fresh 
meats.  Even  a small  concern  like  ourselves  has  found  it  necessary 
to  lease  10  refrigerator  cars.  We  could  not  get  along  without  them. 

So,  on  the  whole,  far  from  corrupt  practices  I want  to  go  on  record 
as  saying  that  no  industry  has  developed  a higher  trade  standard  all 
along  the  line  from  the  buying  of  live  stock  in  the  stockyards  down 
to  the  regulations  by  the  Chicago  Board  of  Trade  for  the  marketing 
of  that  product,  and  then  the  marketing  of  the  finished  product, 
than  exist  in  the  packing  business  to-day.  I do  not  know  of  any 
industry  that  can  be  pointed  to  in  which  the  trade  standards  have 
reached  a higher  point  of  perfection  than  in  the  packing  business. 
It  is  a business  requiring  the  deepest  study.  It  is  a business,  strange 
as  it  may  seem  to  some  people,  in  which  very  high  ideals  of  public 
service  have  been  set  up.  From  my  acquaintance  with  the  large 
packers,  and  I know  them,  they  are  all  men  who  have  distinctly  high 
ideals  in  business  and  high  standards  of  service,  and  require  of  their 
subordinates  that  they  should  conduct  the  business  in  the  highest 
sort  of  way,  to  the  end  that  the  packing  business  shall  properly  and 
economically  serve  the  public.  No  industry  in  the  country,  according 
to  my  estimation,  has  given  a higher  service  than  the  packing  industry 
and  in  that  it  must  be  said  that  the  big  packers  occupy  the  dominating 
position. 

The  packing  business  has  developed  into  a phenomenal  business 
and  in  which  the  older  men  should  take  an  immense  pride.  By  that 
means  stock  raising  has  been  built  up.  But  for  the  technique  and 
business  management  of  these  men  this  countiy  could  not  have 
reached  the  point  of  prominence  which  it  occupies  to-day.  There  has 
been  no  question  about  that  raised  in  this  committee,  I believe,  but 
the  packing  business  is  to-day  one  of  the  most  efficiently  operated 
businesses  in  the  world.  It  is,  for  one  thing,  operated  at  the  lowest 
ratio  of  cost.  There  is  no  industry  that  you  can  point  to  where  the 
operating  ratio  is  as  low  as  12  per  cent  to  15  per  cent  on  the  dollar  of 
sales.  That  is  a position  which  has  continued  in  the  packing  business 
for  years,  and.  in  spite  of  the  fact  that  costs  have  gone  up  very  con- 
siderably, yet  that  ratio  is  still  about  the  same.  It  is  rising  some- 
what, of  course,  and  we  were  not  able  to  prevent  that,  but  our  operat- 
ing ratio  has  gone  up  from  13  to  17  and  the  difference  has  been  taken 
out  of  profits  as  far  as  I can  see. 

The  Chairman.  I understood  you  to  say  jmu  made  8 per  cent  on 
your  capital. 

Mr.  Mayer.  Invested  capital. 

The  Chairman.  That  means  capital  and  surplus? 

Mr.  Mayer.  Our  invested  capital,  of  course,  which  is  capital  and 
surplus. 

The  Chairman.  Does  that  include  borrowed  money? 

Mr.  Mayer.  No,  sir.  And  at  that,  the  packingi  ndustry  to-day 
pays  one  of  the  highest  scales  of  wages  paid  in  any  industry.  That  is 
a significant  point  that  ought  to  be  brought  out. 

Now,  gentlemen  of  the  committee,  as  for  the  bills  pending  before 
this  committee,  I having  covered  my  four  points,  I will  take  up  the 
McLaughlin  bill.  That  bill  of  course  would  absolutely  take  the 
heart  out  of  the  packing  business  as  far  as  I can  see.  It  would 
discourage  the  close,  personal  interest  necessary  for  the  successful 
conduct  of  the  business.  It  would  take  the  heart  out  of  the  men 


388 


MEAT  PACKER. 


who  are  devoting  their  lives  and  their  energies  to  the  good  of  this 
business. 

Mr.  McLaughlin  of  Nebraska.  To  what  section  do  you  refer? 

Mr.  Mayer.  To  the  general  tenor  of  the  bill,  especially  the  part 
where  receiverships  become  very  easy  under  charges  that  may  be 
made  against  packing  companies  or  their  employees. 

Mr.  McLaughlin  of  Nebraska.  I want  to  call  your  attention,  and 
I meant  to  speak  of  it  when  Mr.  Creigh  was  on  the  stand,  to  the  state- 
ment that  this  bill,  which  was  the  former  Senate  bill,  meant  super- 
vision of  the  industry  a long  distance  away,  and  it  simply  means  that 
the  headquarters  would  be  here  in  Washington.  It  provides  that  the 
principal  office  of  the  commission  would  be  in  the  District  of  Columbia, 
but  it  may  meet  and  exercise  all  its  powers  in  any  place.  I call 
attention  to  another  thing:  The  statement  was  made,  so  far  as 
violations  of  the  law  were  concerned,  that  the  packer  or  anjmne 
being  supervised  might  as  far  as  the  law  is  concerned  have  his  day 
in  court,  but  that  as  to  rules,  regulations,  and  orders  made  by  the 
commission  itself  they  would  have  no  day  in  court  on  them.  Listen 
to  this: 

An  order  requiring  a packer  or  operator  to  cease  and  desist  from  violating  a provision 
of  this  act,  or  of  any  of  the  rules,  regulations,  or  orders  issued  hereunder,  shall,  and  so 
forth. 

Mr.  Creigh.  But  that  does  not  say  he  will  get  a regulation  when 
promulgated  into  court.  It  says  an  order  to  desist  from  violating, 
and  so  forth. 

Mr.  McLaughlin  of  Nebraska.  Any  rule,  order,  or  regulation 
hereunder. 

Mr.  Creigh.  No.  It  says  to  cease  or  desist  from  violating  any  of 
the  provisions  of  this  act,  or  to  cease  or  desist  from  violating  any 
rule,  regulation,  or  order  hereunder.  The  court  has  to  take  the  regu-  , 
lation  at  its  face  value.  The  question  is  whether  we  have  violated  j 
the  regulation.  That  was  the  case  when  I cited  the  sausage  regula-  i 
tion.  The  Supreme  Court  said  it  was  within  its  discretion  to  make  < 
the  regulation  and  we  could  not  attack  it. 

Mr.  Mayer.  The  bill  is  so  drastic  and  general  in  its  powers,  as  well 
as  the  commission  form  which  it  provides,  that  as  I said  last  year 
when  I appeared  before  this  honorable  body,  that  as  it  appears  to  me 
it  would  tend  to  break  down  the  credit  structure,  which  is  so  impor- 
tant. As  to  that  credit  structure,  if  you  gentlemen  are  acquainted 
with  what  the  packers  must  do  in  the  way  of  raising  funds,  it  is 
absolutely  vital,  not  only  to  the  packing  business  but  to  the  agricul- 
tural interests  of  this  country,  and  any  law  that  can  operate  on  sus- 
picions will  unquestionably  break  down  the  confidence  of  the  bank- 
ing interests,  which  have  been  built  up  only  through  years  of  patient 
effort  and  fair  dealing  in  this  business. 

Mr.  Tincher.  Don’t  you  think  that  any  constructive  law,  as  this 
committee  always  reports,  would  help  the  credit  of  the  packer  ? 

Mr.  Mayer.  I do  not  doubt  that,  but  I am  coming  to  that.  As  to 
the  other  bills,  Mr.  Haugen’s  bill  is  superior  to  the  Anderson  bill  in  my 
estimation  in  that  it  places  the  Secretary  of  Agriculture  in  charge  as 
opposed  to  the  Federal  Trade  Commission,  because  we  really  think  in 
the  packing  business  more  of  the  Secretary  of  Agriculture  to-day  than 
we  do  of  any  other  arm  of  the  Government  which  might  be  brought  in 
to  regulate  us.  In  the  first  place,  he  has  already  an  efficient  corps  of 


MEAT  PACKER. 


389 


men  in  our  business,  and  has,  through  15  years  of  contact  with  our 
business,  gotten  what  I consider  ought  to  be  a sympathetic  under- 
standing of  the  business.  Of  course  his  functions  have  not  gone  as  far 
as  to  investigate  our  business  processes,  but  it  would  be  very  easy, 
through  the  men  he  has,  to  get  into  that  sort  of  work  if  it  should  be  so 
ordered.  And  the  Secretary  of  Agriculture  is  the  only  logical  man  to 
do  it,  and  the  man  in  whom  the  packers  would  have  the  most  confi- 
dence. 

But  I maintain  that  there  is  no  regulatory  legislation  necessary  in 
the  packing  business.  There  are  no  great  abuses  in  the  packing  busi- 
ness at  the  present  time.  Let  no  one  deceive  himself  on  that.  There 
may  be  sporadic  cases  of  wrongdoing  or  mistakes,  or  mistakes  of 
diplomacy  or  tact,  but  there  are  no  great  abuses  in  the  packing  busi- 
ness at  the  present  time.  But  as  to  just  what  is  coming  out  every 
minute  of  these  meetings  that  I have  attended,  we  feel  that  if  there 
may  be  a proper  and  scientific  knowledge  of  our  business  I am  cer- 
tainly in  favor  of  you  gentlemen  putting  the  machinery  in  motion  to 
get  that  knowledge  and  let  us  do  away  with  the  inuendo  and  get  rid 
of  the  misconception  of  this  magnificent  industry  of  ours  which  does 
not  deserve  the  treatment  it  has  had. 

This  has  been  the  third  year  that  this  industry  has  been  operated  at 
a loss,  and  I tell  you  gentlemen  frankly,  and  you  may  see  it  with  your 
own  eyes,  that  unless  there  is  some  constructive  measure  put  through 
to  put  this  industry  back  in  the  position  it  deserves  in  the  public  eye 
it  will  not  stand  the  strain.  It  is  like  a chronometer,  and  it  will  not 
stand  to  be  knocked  about  in  this  way.  We  would  all  welcome  con- 
structive, supervisory  legislation  by  an  enlightened  department  of 
agriculture  that  would  get  at  the  true  facts  of  our  industry.  There  is 
certainly  need  for  that.  My  suggestion  is  that  any  department  of 
agriculture  or  any  secretary  of  agriculture,  or  some  man  of  a scientific 
type  of  mind,  a man  capable  of  and  determined  to  investigate  fairly 
and  deal  fairly,  might  be  put  in  charge  to  see  for  himself  whether  there 
is  more  than  2J  cents  or  3 cents  on  a dollar  of  sales  left  when  the  packer 
handles  an  animal.  If  that  is  done  I think  you  will  get  the  most 
whole-hearted  cooperation  from  the  industry,  and  I think  in  two  years 
the  industry  will  not  stand  discredited  in  the  eyes  of  the  public,  but 
will  stand  out  strong  and  clear  from  the  standpoint  of  rendering  public 
service. 

Mr.  Ten  Eyck.  Was  that  gross  profit  that  you  referred  to  ? 

Mr.  Mayer.  Before  dividends  and  taxes.  That  was  after  all 
expenses  are  taken  off  and  before  dividends  and  taxes  are  paid. 
Really  in  our  case,  where  we  have  preferred  stock,  it  really  just  covers 
the  operating  expenses.  A man  will  not  pass  his  dividends.  You 
have  to  figure  on  them.  We  do  anyway. 

But,  gentlemen  of  the  committee,  do  not  make  the  mistake  of 
thinking  that  this  legislation  is  going  to  reduce  prices  to  the  consumer 
or  raise  prices  to  the  live-stock  producer.  Any  legislation  of  this  type 
that  you  may  put  through  will  simply  serve  to  enlighten  you  as  to  the 
true  facts  of  our  business.  It  is  not  going  to  raise  prices  of  live  stock 
or  reduce  prices  to  the  consumer,  for  the  simple  reason  that  it  can  not 
be  done.  We  can  not  operate  on  less  than  this  profit. 

Mr.  Tincher.  On  the  proposition  that  the  price  of  live  stock  can 
not  be  raised,  if  you  are  right  about  that  you  just  as  well  get  ready  to 
go  out  of  business,  because  live  stock  can  not  be  produced  at  present 
prices. 


390 


MEAT  PACKER. 


Mr.  Mayer.  That  may  be  true.  But  what  about  the  packer  who 
takes  the  live  stock  ? When  I was  in  Madison  the  other  day  I was 
standing  in  my  yard,  and  a man  came  up  and  said  to  me — 

I am  losing  $200  on  this  load  of  cattle. 

I said  to  him — 

Well,  I am  going  to  lose  another  $400  on  them. 

We  can  not  help  the  producer  on  that. 

Mr.  Ten  Eyck.  What  can  be  done  to  cut  out  the  spread  between 
your  wholesale  price  and  the  amount  that  the  consumer  has  to  pay  % 
If  that  could  be  cut  out  then  the  farmer  might  receive  more  money 
for  his  product  and  thus  be  interested  in  raising  more  cattle,  and  the 
consumer  will  be  more  pleased  because  he  will  buy  cheaper. 

Mr.  Mayer.  The  packer  is  certainly  interested  in  seeing  that  the 
producer  gets  every  dollar  he  can  out  of  his  stock.  We  know  that  if 
live  stock  is  sold  at  a loss  there  will  be  a small  run  of  live  stock  and 
we  will  lose  money.  But  the  spread  comes  after  the  stuff  leaves  the 
packer.  It  is  due  to  various  causes,  such  as  have  been  brought  out 
in  these  hearings — higher  price  of  distribution,  demand  for  expensive 
cuts,  and  for  only  a small  percentage  of  the  carcass.  Somebody  has 
said : What  is  the  retailer  doing  ? But  I need  not  go  into  that. 

Mr.  Ten  Eyck.  Do  you  feel  that  that  spread  is  going  to  be  cur- 
tailed ? 

Mr.  Mayer.  Yes.  In  spite  of  any  legislation  or  regulation  the 
retailer  will  not  be  able  to  stand  up  indefinitely  against  the  pressure 
of  lower  buying  prices.  If  you  will  give  that  a little  time,  probably 
six  months,  a good  deal  of  headway  will  be  made. 

As  to  any  further  constructive  suggestions,  I do  not  know  that  I 
have  anything  else  to  say.  A regular  run  of  live  stock  would  be  a good 
thing,  but  I do  not  suppose  that  can  be  handled.  I am  speaking  of  hogs 
now,  because  I am  mostly  acquainted  with  hogs ; but  in  spite  of  the 
fact  that  live  stock  runs  do  vary,  we  packers  figure  on  a variation, 
and  buy  accordingly.  We  know  that  there  is  going  to  be  a big  run 
on  Monday  and  a short  run  on  Saturday.  Practically  everybody 
stays  out  of  the  market  on  Saturday,  and  we  try  to  tune  our  pur- 
chases until  the  course  of  the  slaughter  takes  it  off  our  hands.  In 
that  way  in  spite  of  the  fact  that  there  is  a great  variation  in  the  run 
of  hogs  on  the  Chicago  market  the  prices  of  hogs  are  maintained 
through  the  skill  of  the  buying  departments  of  the  packers. 

I would  suggest  that  at  this  moment  while  I have  the  ear  of  this 
committee,  that  regardless  of  the  fact  that  the  meat  inspection  law  is 
said  to  be  a good  thing,  it  is  subject  to  some  revision.  It  has  been 
said  that  the  meat  inspection  law  was  a wonderful  thing.  Far  be  it 
from  me  to  make  any  statement  to  the  contrary.  The  meat  inspec- 
tion law  in  its  protection  to  public  health  is  certainly  one  of  the  most 
beneficial  acts  that  this  Congress  has  ever  passed. 

However,  take  note  of  the  fact  that  only  60  per  cent  of  the  animals 
of  this  country  are  slaughtered  under  the  Federal  meat  inspection; 
that  nothing  slaughtered  on  the  farm  for  intrastate  commerce  comes 
under  the  meat  inspection  law.  And  as  a matter  of  fact  40  per  cent 
of  the  entire  slaughter  of  this  country  is  outside  of  the  wonderful  law 
under  which  we  operate. 

Mr.  Clarke.  Have  any  States  regulatory  acts  ? 


MEAT  PACKER. 


391 


Mr.  Mayer.  They  have  some  which  are  more  or  less  effective,  gen- 
erally less.  The  State  laws  do  not  cover  that.  In  view  of  that  fact 
agricultural  communities  have  naturally  found  out  where  to  put 
animals  which  they  do  not  think  would  pass  the  Federal  inspection. 
They  do  not  bring  them  to  the  Federal  yards.  In  that  way  the  law 
is  very  far  off.  I do  not  think  there  is  another  country  in  the  world 
where  you  have  a Federal  meat  inspection  act  which  is  inoperative 
in  two  cases  out  of  five. 

Mr.  Clarke.  Have  you  ever  had  come  under  your  observation  or 
heard  of  cattle  that  was  suspected  of  being  tubercular  going  into  the 
hands  of  a bologna  factory  ? 

Mr.  Mayer.  Just  by  hearsay.  One  more  point  in  regard  to  the 
meat-inspection  act.  Of  course,  the  packing  interests  are  operating 
to-day  under  the  expense  of  condemnation.  We  can  not  pass  that 
on.  We  have  to  assume  that  as  an  operative  cost.  Whether  we 
succeed  in  passing  it  on  depends  upon  our  markets.  The  fact  remains 
that  that  thing  operates  uneconomically,  and  in  this  way:  It  holds 
back  the  eradication  of  live-stock  diseases  in  the  United  States, 
because  the  man  who  is  bearing  the  brunt  of  it  has  no  very  good 
possibility  of  correcting  those  diseases.  If  the  losses  reverted  back 
to  the  farmer,  where  they  belong,  unquestionably  in  a very  short  time 
it  would  result  in  practically  an  elimination  of  live-stock  diseases 
in  the  United  States. 

Mr.  Gernerd.  Wouldn’t  that  mean  there  would  have  to  be  a 
physical  inspection  of  the  live  animals  at  the  point  of  shipment  ? 

Mr.  Mayer.  No;  the  live  animals  would  have  to  be  first  inspected, 
as  it  is  done  now,  on  the  feeding  range. 

Mr.  Clarke.  How  would  you  get  that? 

Mr.  Mayer.  By  tagging. 

Mr.  Voigt.  This  criticism  that  you  make  that  the  inspection  law 
does  not  cover  all  animals  can  not  be  helped  by  the  Congress  because 
the  Congress  can  not  cover  intrastate  inspection. 

Mr.  Mayer.  I understand  that,  but  you  will  agree  with  me  that 
it  is  unfortunate  that  it  can  not. 

Mr.  Ten  Eyck.  Isn’t  it  a fact  that  a steer  might  react  but  still 
be  good  for  meat  ? 

Mr.  Mayer.  Yes,  sir.  We  are  killing  for  the  State  of  Wisconsin 
right  along  every  week  so-called  reacted  cattle,  and  a large  majority 
of  them  pass  for  food. 

Mr.  Ten  Eyck.  They  are  cattle  that  would  be  condemned  for 
containing  tubercular  germs  in  the  milk  but  not  for  meat  ? 

Mr.  Mayer.  Yes,  sir. 

Mr.  Clarke.  A very  close  inspection  is  made  of  them,  all  glands 
are  opened  up,  but  a majority  of  them  pass  this  inspection? 

Mr.  Mayer.  Yes,  sir. 

The  Chairman.  That  is  all;  we  thank  you. 

Mr.  Mayer.  Before  closing  I am  going  to  offer  the  following 
amendments  to  the  Haugen  bill: 

1.  In  case  a bill  is  reported  from  this  committee  giving  jurisdiction 
to  the  Secretary  of  Agriculture  or  any  other  agency  to  supervise  the 
packing  industry,  the  jurisdiction  of  the  Federal  Trade  Commission 
should  be  terminated  so  that  we  will  not  have  two  governmental 
agencies  exercising  the  same  jurisdiction  over  this  industry.  With 
all  the  possibilities  and  probabilities  of  conflict,  the  packer  will  not 


392 


MEAT  PACKEK. 


know  in  such  a case  which  authority  to  obey  and  it  will  result  in  great 
confusion,  as  well  as  duplication  in  governmental  expense  and 
supervision. 

2.  The  bill  should  be  further  amended  so  as  to  amend  the  procedure 
before  the  Secretary  of  Agriculture  in  such  a way  that  his  findings 
of  fact  shall  not  be  binding  upon  the  court,  unless  they  are  supported 
“by  the  weight  of  evidence.”  At  present,  the  Haugen  bill  would 
require  the  circuit  court  of  appeals  to  accept  the  conclusions  of  fact 
if  they  were  supported  “ by  evidence  ” which  means  if  it  was  supported 
by  any  evidence  whatever.  We  think  this  entirely  too  narrow  and 
changes  the  rule  of  evidence  which  has  been  in  force  since  the  founda- 
tion of  the  Republic,  which  gives  to  any  litigant  that  right. 

This  amendment  should  be  made  in  section  205,  page  8,  lines  5 and 
17,  subdivision  (f)  of  the  Haugen  bill.  The  words  “the  weight  of 
the”  should  follow  the  word  “by”  in  line  5,  subdivision  (e),  page  8; 
and  should  follow  the  word  “by,”  line  17,  subdivision  (f),  page  8. 

3.  I think  the  Haugen  bill  ought  to  be  amended  by  striking  out 
section  402,  because  that  provision  of  the  bill  seems  to  attempt  to 
make  it  a criminal  offense  for  the  head  of  any  packing  concern  to 
err  in  judgment.  It  goes  further  than  any  provision  which  I have 
noticed  in  any  legislation  in  that  if  the  officer,  employee,  agent, 
director,  member  of  the  governing  board  of  any  packer,  stockyard 
owner,  commission  man  or  dealer  through  neglect  personally  omits 
to  perform  any  necessary  act  or  properly  to  supervise  or  apportion 
duties  among  his  subordinates  in  the  execution  of  his  authority 
and  functions  vested  in  him,  thereby  a violation  of  the  act  is  brought 
about.  It  leaves  it  to  the  judgment  of  a Government  official  to  say 
when  or  whether  he  has  failed  to  correctly  apportion  the  duty  of 
each  subordinate  in  a packing  concern,  several  of  which  have  as  many 
as  25,000  employees. 

The  same  thing  applies  if  he  negligently  omits  to  properly  super- 
vise such  employees.  No  head  of  any  business  concern  in  this  country 
could  safely  exercise  his  judgment  in  the  face  of  such  a provision  of 
law. 

Furthermore,  it  seems  that  section  401  goes  as  far  as  any  law  should 
extend  on  this  subject.  Therein  every  corporation  is  held  respon- 
sible for  the  act,  omission,  or  failure  of  any  agent,  officer,  or  other 
person  acting  for  any  packer,  stockyard  owner,  commission  man, 
or  trader,  or  packer  agents  in  the  stockyards  or  packing  plants. 

Under  this  language  in  section  401  the  packer  corporation  would 
be  guilty  of  an  offense  even  though  its  employee  absolutely  violated 
the  instructions  that  had  been  given  to  him. 

4.  It  seems  to  me  that  the  definition  of  live-stock  products,  page 
1,  line  11,  of  the  Haugen  bill,  when  taken  in  connection  with  the 
definition  of  a packer  on  page  3,  section  201,  lines  5 and  6,  would 
bring  within  the  operation  of  that  bill  many  concerns  which  the 
authors  probably  do  not  intend  to  supervise  or  regulate.  For 
example,  the  term  “live-stock  products”  in  the  language  of  the 
bill  means  all  products  and  by-products  of  the  slaughtering  and 
meat-packing  industry  derived  in  whole  or  in  part  from  live  stock. 
Section  201,  subdivision  (b)  line  5,  provides  that  the  term  “packer” 
means  “any  person  engaged  in  the  business  or  of  (b)  manufacturing 
or  preparing  live-stock  products  for  sale  or  shipment  in  commerce.” 
Therefore,  any  person  using  as  a raw  material  any  by-product  of 


MEAT  PACKER. 


393 


the  slaughtering  or  meat-packing  industry  derived  in  whole  or  in 
part  from  live  stock  would  be  a packer.  This  definition  would 
make  the  American  woolen  mills,  who  spin  wool  yarn,  a packer, 
because  the  wool  is  a by-product  derived  from  live  stock.  This 
language  would  also  make  the  manufacturers  of  tooth  brushes,  or 
hair  brushes,  automobile  manufacturers  using  leather  or  hair  for 
cushions,  or  soap  manufacturers,  tanners,  shoe  manufacturers, 
harness  makers,  pharmaceutical  manufacturers  using  glands,  glue 
manufacturers,  and  many  other  industries  in  this  country  using 
products  derived  either  in  whole  or  in  part  from  live  stock,  packers. 

I do  not  think  that  it  was  the  intention  of  the  authors  to  include 
these  various  industries  within  the  terms  of  this  bill.  The  definition 
of  live  stock  as  used  in  section  2,  page  1,  lines  9 and  10,  means  “live 
or  dead  cattle,  sheep,  swine,”  etc.  This  term  as  used  in  section  201 
would  bring  within  the  operation  of  the  bill  every  packer  engaged 
in  the  slaughter  of  five  animals  for  interstate  shipment,  so  that  it 
would  hardly  be  necessary  to  provide,  in  the  definition  of  a packer, 
subdivision  (b)  lines  5 and  6,  of  section  201,  but  if  the  committee 
should  desire  so  to  retain  it,  it  should  be  changed  so  as  to  apply  to 
only  food  products  derived  from  the  slaughter  of  live  stock. 

I wish  to  thank  you,  gentlemen. 

The  Chairman.  The  committee  will  now  stand  adjourned  until  10 
o ’clock  this  morning. 

(Thereupon,  at  12  o’clock  midnight,  the  committee  adjourned 
until  10  o’clock  Friday  morning,  May  6,  1921.) 


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MEAT  PACKER. 


Committee  on  Agriculture, 

House  of  Representatives, 

Friday , May  6,  1921. 

The  committee  met  at  10  o’clock  a.  m.,  Hon.  Gilbert  N.  Haugen 
(chairman)  presiding. 

There  were  present:  Mr.  Haugen,  Mr.  Purnell,  Mr.  Voigt,  Mr. 
McLaughlin  of  Nebraska,  Mr.  Riddick,  Mr.  Tincher,  Mr.  Williams, 
Mr.  Sinclair,  Mr.  Hays,  Mr.  Thompson,  Mr.  Gernerd,  Mr.  Clague,  Mr. 
Clarke,  Mr.  Aswell,  Mr.  Kincheloe,  Mr.  Jones,  and  Mr.  Ten  Eyck. 

The  Chairman.  Who  is  the  next  witness,  gentlemen  ? 

Mr.  Veeder.  Mr.  Chairman,  at  the  session  last  evening  I said  I 
would  bring  to  the  committee  this  morning  some  copies  of  Swift  & 
Co’s,  analysis  of  the  Federal  Trade  Commission  report,  part  2.  I 
have  brought  the  copies  here  and  they  are  on  the  table. 

Mr.  Ten  Eyck.  Mr.  Lightfoot,  you  were  going  to  submit  a letter. 

Mr.  Lightfoot.  The  one  I referred  to  last  night  ? 

Mr.  Ten  Eyck.  Yes. 

Mr.  Lightfoot.  It  is  in  the  Congressional  Record  here. 

Mr.  Veeder.  The  letter  written  by  the  Federal  Trade  Commission 
to  the  Secretary  of  State. 

Mr.  Ten  Eyck.  And  also  a letter  of  the  Secretary  of  State. 

Mr.  Lightfoot.  We  did  not  have  a copy  of  the  Secretary  of 
State’s  letter  but  we  had  the  letter  of  the  Federal  Trade  Commission. 

Mr.  Veeder.  There  is  a cop^  of  it  in  Senator  Sherman’s  speech 
which  is  printed  in  the  Congressional  Record. 

Mr.  Williams.  What  is  the  date  of  that  ? 

Mr.  Veeder.  January  27;  and  in  addition  to  that,  the  Senator  has 
printed  in  full  the  reports  of  the  British  Board  of  Trade  and  the 
other  committees  of  the  British  Government  which  made  a report, 
as  to  the  packers,  based,  as  they  state,  upon  the  Federal  Trade  Com- 
mission’s report,  in  which  report  they  recommend  various  devises  for 
cutting  the  packers  out  of  the  business  of  importing  into  England. 

Mr.  Ten  Eyck.  You  have  not  a printed  copy  or  a typewritten  copy 
of  this  letter? 

Mr.  Lightfoot.  I have  a copy  of  it  among  my  papers  at  the  hotel, 
and  I will  see  you  have  a copy  of  it. 

Mr.  Williams.  Is  it  not  in  the  record  ? 

Mr.  Lightfoot.  Yes. 

Mr.  Creigh.  Mr.  Ten  Eyck,  if  I might  explain  the  situation  there, 
there  was  what  was  called  the  Sherman  resolution  which  directed  the 
Federal  Trade  Commission  to  send  to  the  Senate  certain  information. 
The  letter  is  in  the  great  mass  of  information  which  the  Federal 
Trade  Commission  furnished  and  which  was  printed  as  a Senate 
document,  and  the  copy  printed  there  is  the  same,  of  course. 

395 


396 


MEAT  PACKER. 


Mr.  Veeder.  That  is  the  source  from  which  Senator  Sherman  took 
this  letter.  Here  is  a letter  with  the  names  of  the  countries  written 
by  the  Federal  Trade  Commission  and  here  is  the  form  letter  which 
they  requested  be  sent  out  by  the  Secretary  of  State. 

Mr.  Ten  Eyck.  Unless  the  chairman  wishes,  I am  not  going  to  put 
this  letter  in  the  record  until  we  hear  from  the  Federal  Trade  Com- 
mission in  relation  to  it.  I think  that  is  only  fair. 

The  Chairman.  Whatever  you  decide  about  that  is  all  right. 

Mr.  Creigh.  Mr.  Chairman,  Mr.  Thomas  E.  Wilson,  of  Chicago,  is 
here  this  morning,  and  I think  I might  have  one  other  witness,  and  if, 
after  Mr.  Wilson  is  through,  you  can  find  a few  minutes  for  a short 
statement  of  my  own,  I think  then  we  will  be  very  near  the  end. 

The  Chairman.  We  will  be  pleased  to  hear  from  you,  Mr.  Wilson. 

STATEMENT  OF  MR.  THOMAS  E.  WILSON,  PRESIDENT  OF 
WILSON  & CO.,  CHICAGO,  111. 

Mr.  Wilson.  Gentlemen,  I have  prepared  with  some  deliberation 
a short  statement  which  I would  like  to  have  the  privilege  of  reading 
and  talking  from,  if  that  is  agreeable  to  you. 

It  is  my  desire  to  make  a statement  in  an  effort  to  help  you  to  a 
clearer  understanding  of  the  situation  confronting  the  producers,  the 
packers,  and  every  other  element  in  the  live-stock  and  packing 
industry. 

The  problem  is  in  fact  an  economic  one. 

Legislation  may  be  helpful  or  may  aggravate  an  economic  trouble, 
but  it  is  hopeless  to  look  to  it  alone  as  a cure.  What  is  wrong  with 
this  industry  ? Many  people  seem  to  have  lost  sight  of  the  fact  that 
the  packing  industry  is  merely  a processing  and  distributing  factor 
between  the  live-stock  producer  and  the  consumer  of  the  product. 
These  hearings  have  demonstrated  that  the  service  is  efficient  and 
economical,  that  the  profits  are  lower  than  any  other  essential 
industry,  and  that  its  treatment  of  its  competitors  and  of  the  public 
is  fair  and  reasonable. 

In  my  opinion  the  principal  thing  wrong  is  the  unwarranted  sus- 
picion that  something  is  wrong. 

No  industry  can  continue  to  serve  the  public  efficiently  when  it  is 
suspected,  condemned  without  sufficient  proof,  and  is  distrusted 
without  adequate  cause.  Such  a public  attitude  lowers  the  morale 
and  the  effectiveness  of  every  person  in  the  industry;  a lowered 
morale  means  poorer  service,  it  reacts  on  the  laborer  as  well  as  the 
executive.  It  sometimes  makes  work  half-hearted  and  undermines 
the  faculty  for  wise  decision. 

I deem  it  unnecessary  to  answer  the  charge  that  the  smaller  or 
so-called  independent  packers  exist  by  sufferance  of  the  larger  packers, 
or  that  many  have  been  forced  out  of  business.  Not  a single  one 
has  appeared  at  the  hearings  to  support  that  charge,  but  on  the  con- 
trary, large  numbers  of  them  have  appeared  and  refuted  the  state- 
ment by  declaring  they  have  found  the  competition  of  the  larger 
packers  keen  but  fair,  and  their  treatment  has  been  reasonable  and 
in  accord  with  the  principles  of  American  business  ethics.  More 
than  200  of  the  packers,  large  and  small,  have  organized  themselves 
mto  an  association  known  as  the  Institute  of  American  Meat  Packers 


MEAT  PACK  Eli. 


397 


and  have  unanimously  and  with  one  voice  protested  against  the 
adoption  of  the  radical  legislation  heretofore  proposed  for  the  con- 
trol of  the  industry. 

The  consuming  public  have  no  just  cause  for  criticism  against  the 
packing  industry,  for  all  the  evidence  shows  that  they  are  efficiently 
distributing  daily  throughout  the  length  and  breadth  of  the  land 
pure  and  wholesome  meat-food  products  at  a cost  and  profit  to  the 
packer  for  the  services  lower  than  that  rendered  by  any  other  manu- 
facturer or  distributor  of  basic  necessities  of  life  in  this  country. 

I will  offer  some  figures  to  further  demonstrate  this  undeniable 
fact.  The  figures  show  that  out  of  every  dollar  received  by  the 
packers  from  the  sale  of  beef  and  all  the  by-products  derived  from 
the  animal  from  85  to  90  cents  is  returned  to  the  producer  of  the  live 
stock.  One  of  the  larger  packers  has  compiled  a statement  covering 
several  years  showing  their  experience  on  this  point,  which  I will 
set  out  here. 

I shall  not  undertake  to  read  these  figures  now  because  they  will 
he  put  in  the  record,  but  I just  want  to  call  your  attention  to  the 
items.  This  statement  runs  from  1915  to  1920.  The  first  item  is 
the  average  live  cost  for  each  year;  the  second  item  is  the  average 
proceeds  per  head  from  the  sale  of  beef ; the  third  item  is  the  average 
proceeds  per  head  from  the  sale  of  by-products;  and  the  last  one  is 
the  average  proceeds  per  head  from  sale  of  beef  and  by-products, 
and  the  other  is  the  average  percentage  of  proceeds  per  head  from  the 
beef  and  by-products  paid  for  live  animals. 

In  answer  to  some  of  the  questions  asked  here  yesterday,  take  the 
year  1920,  the  live  cost  of  the  animals  averaged  $93.85;  the  average 
proceeds  from  the  sale  of  beef  was  $86.31;  the  average  proceeds  per 
head  from  the  sale  of  the  by-products  was  $21.17;  and  the  average 
proceeds  for  the  beef  and  the  by-products  was  $107.48. 

Mr.  Kincheloe.  Was  this  at  your  own  plant  or  for  the  whole 
business  ? 

Mr.  Wilson.  These  figures  are  compiled  from  one  of  the  large 
packers.  I have  not  got  them  for  the  others. 

Mr.  Tincher.  This  is  your  own  statement  ? 

Mr.  Wilson.  No,  sir;  these  are  the  figures  of  Swift  & Co.,  but 
there  would  be  very  little  variation.  I have  checked  these  figures, 
as  near  as  I could,  with  our  own  figures,  and  there  is  very  little 
variation  It  is  hardly  perceptible. 


Institute  calculation  based  on  published  figures  of  Swift  & Co. 


1915 

1916 

1917 

1918 

1919 

1920 

Live  cost  (average  price  per  head) 

Average  proceeds  per  head  from  sale  of  beef 

Avergae  proceeds  per  head  from  sale  of  by-products 

Average  proceeds  per  head  from  sale  of  beef  and 
by-products 

$72.  49 

$73.  68 

$84.  45 

$92.  70 

$102.82 

$93.  85 

63.  28 
18.58 

63. 98 
19.  08 

68. 97 
24.  09 

61. 45 
22.06 

88.  21 
25.  59 

86.  31 
21. 17 

81.86 

83.  06 

92.06 

103.  51 

113.80 

107.48 

Average  percentage  of  proceeds  per  head  from  beef  and 
by-products  paid  for  live  animals 

88.8  88.7 

91.7 

89.6 

90.4 

1 

87.3 

398 


MEAT  PACKER. 


The  average  return  to  the  producer  shown  in  each  instance  was 
never  less  than  87.3  per  cent,  and  the  meat  was  invariably  sold  to  the 
consumer  for  less  than  cost  of  the  live  animal.  Out  of  the  remaining 
10  or  12  cents  from  each  dollar  of  sales,  the  packer  must  pay  all 
manufacturing  and  distributing  costs,  including  labor,  icing,  trans- 
portation, insurance,  fuel,  power,  lights,  telephone,  depreciation, 
losses  and  profits,  if  any.  The  packer  pays  to  the  producer  the 
largest  possible  portion  of  what  he  receives  from  the  retailer,  and 
delivers  the  product  to  the  retailer  at  the  lowest  possible  cost.  If 
the  entire  net  profit  received  by  the  five  larger  packers  from  all 
sources  last  year  on  business  transacted  in  this  country  were  divided 
by  the  37,155,958  head  of  live  stock  slaughtered  by  them,  it  would 
only  amount  to  19  cents  per  head,  and  if  this  was  refunded  to  the 
millions  of  producers  it  would  amount  to  such  a small  sum  to  each 
individual  he  would  scarcely  realize  it.  On  the  other  hand,  the 
consumer  no  doubt  is  anticipating  cheaper  meat  from  this,  legislation. 
But  if  the  entire  net  profit,  which  was  equivalent  to  less  than  a 
quarter  of  a cent  on  each  dollar  of  sales,  was  distributed  between  the 
tens  of  millions  of  consumers  who  purchased  our  product  there  would 
not  be  a coin  or  even  a postage  stamp  small  enough  in  denomination 
to  make  change  as  he  bought  each  dollar’s  worth  of  our  product.  It 
is  the  immense  volume  of  business  gradually  accumulating  these  small 
fractions  that  make  up  our  actual  net  profits.  Yet  we  have  witnessed 
both  the  representatives  of  some  of  the  producers  and  some  consumers 
making  common  cause  at  these  hearings,  advocating  the  same  restric- 
tive legislation  to  further  control  this  industry.  Now,  under  these 
circumstances,  for  the  same  bill  to  benefit  both  the  producer  and  the 
consumer  is  an  absurdity.  The  packers’  margin  of  profit  is  certainly 
at  a minimum.  If  it  were  entirely  eliminated  neither  the  producer 
or  consumer  would  be  conscious  of  it  in  his  transactions,  but  the 
packing  industry  would  be  ruined  and  all  would  suffer  great  losses. 

I set  forth  at  this  point  a tabulation  of  the  profits,  investment, 
sales,  and  slaughter  of  the  five  larger  packers  for  each  year  from  the 
year  1913  to  the  year  1920,  inclusive,  showing  the  profit  per  dollar 
of  investment,  profit  per  dollar  of  sales,  and  profit  per  animal  slaugh- 
tered in  each  of  these  years. 

Now,  gentlemen,  here  are  three  tables  giving  you  the  figures  any 
way  you  want  them.  I think  from  the  standpoint  of  the  producer, 
he  is  interested  in  knowing  the  profit  that  the  packer  takes  as  toll 
per  head  on  the  cattle,  sheep,  and  hogs  they  handle,  and  I think  the 
consumer  is  interested  in  knowing  what  toll  he  is  paying  to  the 
packer  in  the  way  of  a profit  on  a dollar’s  worth  of  stuff  that  the 
consumer  is  buying.  If  those  tables  do  not  satisfy,  a table  is  also 
here  showing  the  profit  on  the  invested  capital  for  the  eight  years. 
The  variation  on  the  profit  per  animal  slaughtered  runs  from  19 
cents  last  year,  1920;  the  highest  was  in  1917,  $1.95  per  head,  and 
in  1913  it  was  59  cents  per  head,  and  the  average  for  the  eight  years 
was  97  cents  per  head.  During  the  eight  years  we  slaughtered 
297,000,000  animals,  or  sales  were  $17,000,000,000,  and  the  total 
profits  during  that  time  were  $289,000,000. 


MEAT  PACKER. 


399 


Profits , investment,  sales,  and  slaughter  of  the  5 larger  packers  from  1913  to  1920. 


Year. 

Profits. 

Capital  and 
surplus. 

Profit 

per 

dollar  of 
invest- 
ment. 

Sales. 

Profit 

per 

dollar  of 
sales. 

Total 

slaughter.1 

Profit 

per 

animal 

slaugh- 

tered. 

1913 

$19,888, 616 
22, 079, 124 
30, 596, 289 

$281,784, 873 
292,411,396 
305, 259, 192 
326,680, 070 
364, 372, 206 
429, 642, 800 

Cents. 

7.1 

$1,152,269,789 
1,261,991,449 
1, 323, 417, 156 
1,642, 553,986 
2, 189, 438, 423 
3, 216, 507, 971 

Cents. 

1.7 

33,718,980 
32,219,639 
33,470,995 
37,725,706 
37,029,947 
42,303,301 
44, 324, 805 
37, 155,958 

$0.59 

1914 

7.6 

1.7 

.69 

1915 

10.0 

2.3 

.91 

1916 

52, 322, 501 
72, 279, 586 

16.0 

3.2 

1.39 

1917 

19.8 

3.3 

1.95 

1918 

51,631.341 
33,  508,670 
7,218,086 

12.0 

1.6 

1.  22 

1919 

546, 249, 774 
590, 297, 028 

6.1 

3,  500, 703, 198 

.96 

.76 

1920 

1.2 

3, 013, 002, 000 

.24 

.19 

1 Slaughter  of  one  company  estimated  for  the  year  1913.  Figures  for  1914,  1915,  1916,  and  1917  include 
total  yearly  purchase  of  one  company,  which  undoubtedly  approximates  the  total  yearly  slaughter. 


As  an  illustration,  in  the  year  1913,  the  actual  net  profits  of  the 
five  larger  packers  on  all  business  transacted  by  them  was  $19,888,616. 
The  total  capital  and  surplus  was  $281,784,873,  making  a return  of 
7.1  cents  profit  per  dollar  of  investment.  The  total  sales  of  the  five 
larger  packers  for  that  year  was  $1,152,269,789.  This  includes  many 
items  not  derived  from  animals.  The  profit  per  dollar  of  sales  was 
1.7  cents.  The  total  slaughter  of  the  five  larger  packers  for  that 
year  was  33,718,980  head  of  live  stock.  When  you  divide  this 
number  into  the  total  profits  of  $19,888,616  it  shows  that  the  packers 
bought,  slaughtered,  processed,  and  delivered  to  the  retailers  the 
meat  and  by-products  from  each  of  these  animals  at  an  average 
profit  of  only  59  cents  per  head.  During  the  8 years  from  1913  to 
1920,  the  aggregate  cumulative  sales  of  the  five  larger  packers  was 
$17,299,883,972.  During  the  same  period  the  aggregate  number  of 
live  stock  slaughtered  was  297,949,331.  The  aggregate  profits 
during  this  8-year  period,  which  included  in  all  the  years  the  profits 
from  all  sources,  including  the  plants  in  foreign  lands  (except  in  1919 
and  1920),  were  $289,524,213,  less  than  1.7  cents  per  dollar  of  sales, 
or  approximately  97  cents  on  each  head  of  live  stock  slaughtered. 

I submit  that  an  average  profit  per  head  over  a period  of  eight 
years  of  97  cents  is  a remarkably  reasonable  remuneration  for  the 
complicated  work  of  killing  and  dressing  a hog,  steer,  or  sheep,  and 
preparing,  distributing,  selling,  and  shipping  the  meat  and  by-products 
derived  therefrom.  In  fact,  for  the  stability  and  safety  of  the 
industry  it  should  be  higher. 

In  order  to  show  further  that  the  packing  industry  is  serving  the 
country  economically,  as  well  as  efficiently,  I should  like  to  present 
an  analysis  of  the  aggregate  profits  and  sales  of  the  44  leading  indus- 
trial corporations,  including  the  five  largest  packing  companies. 
These  corporations,  both  packers  and  nonpackers,  were  selected 
because  of  the  availability  of  their  annual  reports,  and  the  figures 
were  taken  either  from  the  annual  reports  of  the  companies  or  from 
Moody’s  Manual  and  the  Commercial  and  Financial  Chronicle. 

The  list  includes  1 manufacturer  of  beverages,  2 petroleum  refiners, 
1 manufacturer  of  leather,  3 sugar  refiners,  2 manufacturers  of  explo- 
sives, 8 manufacturers  of  machinery,  1 manufacturer  of  tobacco,  1 
coal-mine  operator,  7 manufacturers  of  motor  cars,  1 manufacturer 
of  rubber  products,  3 manufacturers  of  clothing,  3 manufacturers  of 


400 


MEAT  PACKER. 


steel,  3 retail  chain  stores,  2 mail-order  houses,  and  5 meat  packers. 
These  44  corporations,  with  an  invested  capital  and  surplus  of  about 
$4,280,000,000,  handled  almost  $8,000,000,000  worth  of  business 
during  1920,  which  netted  nearly  $350,000,000  in  profits.  The  aggre- 
gate business  of  the  five  packers  was  about  $3,013,000,000,  with  an 
aggregate  net  profit  of  $7,218,086.  The  combined  business  of  the  other 
39  corporations  was  $4,912,000,000,  or  about  60  per  cent  more  than 
that  of  the  five  packers.  On  this  amount  of  business,  the  nonpackers 
received  aggregate  net  profits  of  $347,526,243,  as  compared  with 
$7,218,086  for  the  five  packers.  The  sales  ($3,013,002,000)  of  the 
5 packers  were  approximately  three-fifths  of  the  sales  of  the  39  non- 
packers, while  the  aggregate  profits  of  the  5 packers  were  only  a little 
more  than  one-fiftieth  of  the  aggregate  profits  of  the  39  nonpackers. 
While  the  year  1920  may  not  be  fairly  representative,  nevertheless 
any  other  year  would  show  substantially  the  same  results. 

This  shows  that  the  44  corporations  in  1920,  with  a capital  and 
surplus  of  $4,280,000,000,  did  a volume  of  business  amounting  to 
$8,000,000,000,  and  the  profits  of  those  44  corporations  were 
$350,000,000.  The  five  packers,  who  are  included  in  that,  did  a , 
business  in  volume  of  $3,000,000,000,  or  about  three-fifths  of  the 
total  of  the  39L  other  nonpacker  corporations,  and  the  profits  of  the 
packers  were  $7,218,000.  The  profits  of  the  39  other  nonpacking  cor-  ; 
porations  were  $347,000,000;  that  is,  $347,000,000  on  a volume  of  ! 
$4,912,000,000,  while  the  packers’  profits  were  $7,000,000  on  a volume 
of  $3,000,000,000.  The  39  other  corporations  did  60  per  cent  more  ) 
business,  but  the  packers  earned  only  one-fiftieth  of  what  these 
other  39  corporations  earned.  I have  set  that  forth  here  in  detail 
and  I will  not  take  your  time  to  cite  that  further. 

None  of  the  five, packers  averaged  as  much  as  three-fifths  of  a cent  of  - 
profit  on  each  dollar  of  sales.  The  average  for  the  five  was  less  than  j 
one-quarter  of  a cent.  The  average  rate  of  profit  of  the  other  39  t 
corporations  was  6.93  cents  on  each  dollar  of  sales,  or  approximately  \ 
twenty-eight  times  greater  than  the  average  of  the  five  packers. 

The  five  packes  had  about  $590,000,000  of  capital  and  surplus  at 
the  beginning  of  the  fiscal  year.  j 

Mr.  Tincher.  What  year  did  you  take  there? 

Mr.  Wilson.  1920.  The  packer  with  the  highest  return  received 
about  2\  cents  on  each  dollar  invested.  The  average  for  the  five  was 
slightly  less  than  1|  cents  per  dollar  of  investment. 

The  other  39  corporations  had  almost  $3,700,000,000,  to  be  accurate, 
$3,690,932,520  of  capital  and  surplus.  Their  average  profit  per 
dollar  of  investment  was  more  than  seven  times  as  great  as  that  of  the 
packers,  9.22  cents  as  compared  to  1.23  cents. 

I have  also  had  a comparison  made  for  another  year  involving  a 
a larger  number  of  industrial  concerns  which  will  illustrate  the 
point  that  the  packing  industry  is  serving  the  country  as  efficiently 
and  at  a far  lower  percentage  of  profit  than  probably  any  other  basic 
industry  in  the  country.  In  the  year  1919  the  reports  of  81  leading 
industrials,  including  the  same  packing  concerns,  showed  that  76 
nonpackers  averaged  10.79  cents  per  dollar  of  investment  and  9.05 
cents  per  dollar  of  sales,  as  compared  with  6.13  cents  per  dollar  of 
investment  and  nine-tenths  of  a cent  per  dollar  of  sales  averaged  by 
the  five  packers  that  year.  The  yearly  figures  show  plainly  that  when 
the  packing  industry,  which  handles  a perishable  product,  is  ranked 
in  accordance  with  its  rate  of  profit  on  either  sales  or  investment, 


MEAT  PACKER. 


401 


it  takes  a place  near  the  bottom  of  the  list.  When  ranked  with  refer- 
ence to  the  volume  of  its  sales,  it  heads  the  list  of  industries.  Thus, 
the  largest  industry  in  America  has  been  built  up  to  the  first  rank 
by  large  sales  and  a small  rate  of  profit,  usually  well  maintained; 
never  becoming  excessive  but  nearly  always  earned. 

In  my  opinion  the  real  trouble  lying  at  the  base  of  this  whole 
question  is  not  so  much  a packers’  problem  as  it  is  a producers’ 
problem.  The  most  persistent  complaint  arising  from  the  producers 
has  been  because  of  the  fluctuations  in  prices  in  the  stockyards. 
Because  of  these  fluctuations,  due  to  conditions  of  supply  and  demand, 
competition  and  other  causes,  little  understood  by  the  producers, 
they  have  been  misled  into  the  belief  that  in  some  manner  these 
markets  were  manipulated. 

There  is  no  keener  competition  in  any  business  in  this  country 
than  there  is  in  the  purchase  of  live  animals  in  the  markets  and  in 
the  sale  of  finished  products,  as  the  figures  which  I have  already 
presented  bear  convincing  witness.  The  fundamental  cause  of 
fluctuations  in  prices  is  largely  due  to  the  unscientific  and  inefficient 
system  employed  by  the  producers  in  marketing  their  products. 
There  is  not  now  and  has  never  been  any  permanent  efficient  system 
governing  the  marketing.  The  producers  as  a rule  do  not  attempt 
to  distribute  shipments  to  markets  so  as  to  produce  a fairly  uniform 
flow  throughout  the  week,  month,  or  year.  The  packers  are  expected 
to  absorb  all  that  is  sent  to  market  in  whatever  quantity  and  what- 
ever time,  to  pay  cash  on  the  spot  and  then  find  a quick  market  for 
all  the  product.  Such  a contention  necessarily  adds  complications 
and  problems  to  the  business.  The  expansion  and  contraction  of 
labor,  equipment,  and  financing  necessary  to  economically  handle 
business  under  such  a system  necessarily  produces  many  problems 
for  which  we  would  gladly  welcome  some  permanent  solution.  The 
general  public  should  understand  and  appreciate  the  extent  and 
rapidity  of  these  changes,  expanding  the  industry  to  unprecedented 
dimensions  and  then  contracting  it  again  with  amazing  speed. 

As  an  example,  in  March,  1913,  the  United  States  exported  770,302 
pounds  of  fresh  beef.  In  March,  1918,  due  to  the  demands  produced 
by  the  war,  we  exported  62,064,261  pounds,  or  more  than  eighty  times 
as  much.  In  March,  1920,  these  figures  showed  6,036,166  pounds,  or 
about  one-tenth  the  quantity  exported  two  years  previously,  and 
now  it  is  practically  nil.  We  are  practically  out  of  the  export 
business  on  fresh  beef.  Exports  in  other  meats  also  showed  a very 
heavy  decrease.  The  sudden  termination  of  the  war  found  produc- 
tion at  its  peak’.  Everything  had  been  produced  at  extraordinarily 
high  cost.  Readjustment  to  a peace  basis,  the  contraction  of  credits, 
the  general  movement  to  force  a lower  level  in  the  cost  of  living  (fos- 
tered by  Governmental  agencies),  the  effect  of  Government  action 
in  marketing,  at  figures  below  cost,  large  quantities  of  food  supplies 
accumulated  for  war  purposes,  and  many  other  causes  have  con- 
tributed to  a very  unsatisfactory  year  for  packer  and  producer  alike. 
One  of  the  most  important  causes  of  the  decrease  in  the  value  of  live 
stock  with  consequent  losses  to  producers  was  the  decline  of  our 
abnormally  large  export  trade  in  meat  products.  I need  not  point 
out  to  this  committee  that  the  value  of  American  live  stock  is 
determined  by  the  available  supply  of  cattle,  swine,  and  sheep,  and 
46985—21 26 


402 


MEAT  PACKER. 


by  the  consumptive  demand  in  the  United  States  and  abroad  for 
American  meat  products  and  by-products.  If  either  the  domestic 
or  foreign  demand,  or  both  as  has  been  the  case,  is  reduced  without 
a proportional  reduction  in  the  supply,  the  meat  animal  necessarily 
becomes  less  valuable.  The  packer  can  not  continue  to  pay  out  more 
for  live  stock  than  he  can  get  for  the  meat  and  products  derived 
therefrom.  Let  us  consider  for  a moment  the  changes  which  have 
occurred  in  foreign  demand  for  American  meat  products. 

In  the  month  of  March,  1918,  after  the  Allies  had  declared  that 
the  further  prosecution  of  the  war  depended  on  immediate  shipments 
of  wheat  and  meat  from  this  country,  we  exported  more  than 
300,000,000  pounds  of  pork  products — averaging  10,000,000  pounds 
a day  and  equivalent  to  the  daily  slaughter  of  66,000  hogs.  These 
March,  1918,  exports  of  pork  products  alone  represented  the  slaugh- 
ter of  more  than  half  the  number  of  hogs  owned  in  the  United  King- 
dom at  the  beginning  of  the  war.  (Official  statistics  of  United  States 
Food  Administration.)  I might  say  that  that  was  only  the  one 
month  of  March,  1918,  that  we  were  called  upon  to  ship  this 
300,000,000  pounds.  At  that  time  I was  chairman  of  the  packers’ 
committee  working  with  the  Food  Administration,  and  I was  notified 
on  one  Wednesday  over  the  long  distance  phone  that  we  must  be 
prepared  on  the  following  week  to  commence  shipping  on  this  basis 
of  300,000,000  pounds  per  month.  That  meant  a perishable  product 
and  it  was  at  a time  when  transportation  was  difficult.  We  were 
just  working  out  of  the  terrible  blockade  of  the  February  heavy 
snowstorm,  which  you  gentlemen  will  remember  was  the  most  severe 
the  country  had  ever  seen;  but  we  went  through  and  delivered  and 
shipped  the  300,000,000  pounds  in  March,  an  equal  quantity  in 
April,  and  an  equal  quantity  in  May,  and  I can  say  here,  without 
taking  unto  the  packing  industry  any  particular  credit,  that  the 
purchasing  commission  of  the  British  Government  at  that  time  said 
that  had  it  not  been  for  the  facilities  of  the  packers  in  meeting  this 
situation  the  war  in  Europe  would  practically  have  been  lost.  Now, 
I do  not  claim  that  for  the  packers.  I claim  that  fully  as  much  for 
the  producers  of  the  country.  They  made  this  possible  but  it  was 
done,  and  those  people  over  there  appreciated  the  seriousness  of  the 
situation  and  the  need  of  the  facilities  that  these  packers  had  built 
up  and  appreciated  that  without  them  conditions  would  have  been 
much  more  serious  than  they  were. 

Mr.  Tincher.  What  months  was  that  ? 

Mr.  Wilson.  March,  April,  and  May,  1918.  In  those  three  months 
we  shipped  900,000,000  pounds  of  perishable  produ'cts,  and  if  you 
will  refer  to  the  records  of  the  Food  Administration  you  will  find  a 
similar  statement  made  by  their  chief  statistician,  Mr.  Chase,  which 
said  that  it  was  the  conclusion  of  all  that  without  these  very  material 
increased  shipments  of  meat  and  wheat,  conditions  would  have  been 
much  more  serious  in  Europe. 

Total  exports  of  meat  products  in  March,  1918,  reached  the  amazing 
figure  of  395,651,195  pounds.  (Official  statistics  of  the  United  vStates 
Department  of  Commerce.)  Now  what  was  the  case  in  March,  1921  ? 
This  is  two  months  ago  and  is  the  latest  month  for  which  official  figures 
are  available.  Instead  of  exporting  meat  products  amounting  to 
395,651,195  pounds  as  in  March,  1918,  we  exported  only  155,967,925 
pounds. 


MEAT  PACKER. 


403 


Or  compare  the  exports  last  year,  1920,  with  the  exports  of  the 
year  before,  1919,  when  Europe  was  still  buying  in  very  large  quanti- 
ties, and  you  will  have  another  vivid  statistical  picture  of  one  reason 
live  stock  and  meat  prices  went  down.  In  1919  we  exported  prac- 
tically 3,000,000,000  pounds  of  meat  products,  worth  approximately 
$940,000,000.  Last  year  we  exported  less  than  1,730,000,000  pounds 
of  meat  products,  valued  at  less  than  $415,000,000.  According  to 
official  figures,  the  decrease  in  our  export  trade  during  this  one  year 
amounted  to  1,270,000,000  pounds,  or  a loss  of  $526,013,456.  Fig- 
uring this  at  85  cents  out  of  each  dollar  to  the  producer  and  you  will 
see  why  the  American  farmer  has  less  money  to  spend.  It  means  a 
reduction  of  income  of  the  producer  exceeding  $400,000,000. 

Now,  let  us  examine  in  this  connection  also  the  facts  in  relation  to 
the  exports  of  beef.  In  the  year  1918  we  exported  728,000,000  pounds 
of  beef.  In  the  year  1919  this  volume  had  decreased  to  314,000,000, 
or  a decrease  of  57  per  cent.  In  the  year  1920  we  exported  only 
164,000,000,  which  was  a decrease  of  78  per  cent  from  the  year  1918. 
These  figures  are  from  the  statistics  of  the  Bureau  of  Animal  Industry. 
During  1920  exports  of  beef  were  less  by  150,000,000  pounds  than  in 
1919,  and  less  by  584,000,000  than  in  1918.  The  decrease  in  the  year 
1919  was  equivalent  to  approximately  300,000  cattle,  as  compared 
with  1918.  The  decrease  in  1920,  as  compared  with  1918,  was  equiva- 
lent to  approximately  1,128,000  head  of  cattle. 

Pork  exports  declined  1,121,000,000  pounds  during  1920,  as  com- 
pared with  1919,  which  was  equivalent  to  approximately  7,000,000 
hogs.  It  is  unquestionably  a fact  that  the  abnormally  increased 
value  of  live  stock  and  many  other  kinds  of  raw  material  was  due  to 
relative  shortage  of  supply  caused  by  war  conditions.  The  conse- 
quent depression  was  caused  by  the  afterwar  contraction.  Its  slack- 
ening has  meant  hardships  to  packers  as  well  as  to  producers.  More 
than  one  packing  company  has  been  unable  to  earn  the  dividends 
which  its  stockholders  had  a right  to  expect,  and  many  producers 
have  suffered  losses  they  could  little  afford  to  stand.  It  would  be  a 
great  misfortune  if  the  hardships  which  everyone  has  suffered,  and 
the  farmers  most  of  all,  should  cause  us  to  adopt  legislative  panaceas 
which  will  only  serve  to  divert  us  from  energetic  efforts  to  adjust  our- 
selves rationally  to  the  changed  and  difficult  situation. 

During  the  war  it  might  perhaps  have  seemed  possible  to  legislate 
prosperity,  or  at  least  security  in  the  form  of  a guaranteed  profit  for 
producers  by  fixing  the  price  of  farm  products.  But  this  could  be 
done  only  because  we  were  in  a sellers7  market  and  because  the  Food 
Administration  practically  controlled  a large  part  of  the  world  pur- 
chases. This  is  no  longer  true,  and  no  one  can  underwrite  a fixed 
price  for  raw  material  now.  No  one  can  guarantee  the  farmer  or  the 
industrialist  protection  from  changing  markets  and  altering  values. 
It  would  bankrupt  nations.  Even  if  there  were  any  agency  with 
power  to  do  this  the  exercise  of  such  power  would  not  long  be  tolerated 
by  the  consuming  public. 

It  seems  to  me  that  back  of  all  the  agitation  for  legislation  is  the 
feeling  that  the  Government  should  do  something  for  those  who  have 
suffered  losses.  I would  be  glad  to  see  the  Government  do  what  it 
properly  can  to  help  the  producers,  farmers,  or  any  industry  in 
need  of  its  assistance.  But  congressional  enactment  can  not  change 
the  economic  conditions  existing  at  this  time  in  the  world.  More- 


404 


MEAT  PACKER. 


over,  this  situation  is  broader  than  the  meat  and  live-stock  industry. 
What  has  happened  to  meat  and  live-stock  values  has  happened  to 
corn,  wheat,  cotton,  and  many  other  raw  materials  and  finished 
products.  The  plain  fact  is  that  we  have  all  been  affected  by  the 
same  economic  situation  and  must  win  our  way  out  by  ability, 
confidence,  courage,  enterprise,  and  adaptability. 

If  legislation  could  be  substituted  for  economics,  I might  be 
tempted  to  ask  that  some  bill  be  passed  to  restore  the  value  of  packing- 
house products.  I have  already  pointed  out  that  we  pay  for  live 
stock  out  of  the  money  we  receive  for  the  meat  and  by-products 
derived  from  the  animals.  A decline  in  by-products  or  meat  means 
that  we  can  get  less  money  for  the  total  products.  When  by-products 
were  at  their  peak  values  along  in  the  summer  of  1919,  the  net  worth 
to  the  packer  of  the  total  by-products,  including  the  hide  from  an 
average  steer,  was  $35.  That  was  the  peak.  This  enabled  us  to  sell 
the  meat  from  the  animal  at  less  than  we  paid  for  the  live  animal. 
To-day  we  realize  less  than  $8.  In  some  cases  the  money  which  can 
be  realized  on  certain  by-products  does  not  cover  the  cost  of  preparing 
them  for  market. 

I should  like  to  call  your  attention  to  the  declines  in  the  value  of 
hides  and  some  of  the  principal  by-products.  I set  forth  at  this  point 
a table  showing  the  prewar  price,  the  “peak”  price,  and  current  j 
prices  of  by-products  of  cattle  for  the  week  of  April  23,  1913,  the 
“peak”  date  in  1919-20,  and  the  present  market  price  for  the  < 
week  ending  April  23,  1921,  also  showing  the  percentage  of  decrease  * 
from  the  “peak”  price:  The  accompanying  tables  give  the  prewar 
price,  the  “peak”  price,  and  current  prices  of  principal  by-products  . 
of  cattle. 

By-product  prices. 


Prewar 
price, 
week  of 
Apr.  23, 
1913. 

Peak  of  market- 

Present 
market, 
week  of 
Apr.  23, 
1921. 

Per  cent 
decrease 
from 
peak. 

Date. 

Price. 

Heavy  native  steer  hides 

$0. 16J-J0. 17 

Aug.  2,1919 

$0. 53 

$0. 10 

81 

Colorado  steer  hides . 

. 16| 

do 

. 48 

.08 

83 

Light  native  steer  hides 

. 151-  .16 

do 

.60-  .61 

.08-  .09 

86 

Branded  cowhides 

.16 

do 

. 50 

.08 

84 

Edible  tallow 

? 

1 

July  12,1919 

25  - . 26 

.05|-  -06 

77 

Prime  oleo  stearine 

.11 

do 

.28|-  .29 

.06J-  .06| 

78 

Extra  oleo  oil 

• HI-  .H| 

do 

. 34  - . 35 

.10|-  ,10f 

70 

Fertilizer: 

Dried  blood  (per  unit) 

2.  80  - 2.  85 

Mar.  27,1920 

8.  40  - 8.  50 

2.  85  - 3.  00 

65 

Tankage,  concentrated  (penmit).J 

2.  40  - 2. 45 

do 

7. 25  - 7. 40 

2.  85  - 3.  00 

64 

(The  hide  prices  are  from  Hide  and  Leather  and  the  other  prices  from  the  National  Provisioner.'1 


As  an  illustration,  heavy  native  steer  hides  were  quoted  during  the 
week  ending  April  23,  1913,  at  16J  to  17  cents  per  pound.  On 
August  2,  1919,  the  same  hides  were  selling  at  53  cents  per  pound. 
The  present  market  price  is  10  cents  per  pound,  showing  a decline  of 
81  per  cent  from  1919,  as  compared  with  the  present  price.  Colorado 
steer  hides  in  1913  were  worth  16J  cents,  in  1919  48  cents,  now  8 
cents,  a decline  of  83  per  cent  in  a little  more  than  one  year. 

Edible  tallow  was  worth  in  1913  8 cents,  in  1919  25  cents,  in  1921 
5f  cents,  a decline  in  a little  more  than  a year  of  77  per  cent.  Prime 
oleo  stearine  was  worth  11  cents  in  1913,  28  to  29  cents  in  1919,  and 
is  now  quoted  at  6i  to  6J  cents,  a decline  of  78  per  cent. 


MEAT  PACKER. 


405 


The  price  of  live  stock  reflects  the  decline  in  both  by-products  and 
meat,  for  the  value  of  the  meat,  too,  has  declined  heavily. 

Mr.  Tinchner.  Mr.  Wilson,  do  you  know  of  any  other  product 
that  bears  the  same  relation  in  price  to  the  prewar  price  ? 

Mr.  Wilson.  No;  I do  not. 

Mr.  Tinchner.  Do  you  know  of  any  manufactured  article  where 
the  product  bears  anywhere  near  the  relation  or  is  as  cheap  as  the 
prewar  price  ? For  instance,  anything  manufactured  from  the  hide  ? 

Mr.  Wilson.  I have  no  figures  to  show  that  exactly.  Of  course, 
leather  is  a lot  cheaper  now. 

Mr.  Tinchner.  Than  it  was  before  the  war  ? 

Mr.  Wilson.  Than  at  the  peak. 

Mr.  Tinchner.  I am  talking  about  before  the  war. 

Mr.  Wilson.  I do  not  think  leather  is  cheaper  than  before  the  war; 
I have  no  figures  before  me  on  that. 

Mr.  Ten  Eyck.  I know  this : I have  bought  the  same  kind  of  shoe 
for  a great  many  years,  and  in  1913  I bought  the  shoe  for  $7.  Not 
over  a month  ago  I paid  $12  for  the  same  shoe. 

Mr.  Wilson.  That  shoe  in  1920  or  1921  was  probably  selling  for 
more  than  $12,  was  it  not? 

Mr.  Ten  Eyck.  Yes;  it  was  selling  for  $14. 

Mr.  Wilson.  Of  course,  the  shoe  manufacturer  has  not  had  the 
reduction  in  labor.  I presume  there  is  a big  item  of  labor  in  the  shoe, 
and  that  has  not  been  reduced  in  proportion  to  the  reduction  in  the 
leather. 

Mr.  Tincher.  There  has  been  no  reduction  that  can  be  compared  to 
the  reduction  in  the  raw  material  ? 

Mr.  Wilson.  I think  you  are  correct  in  that. 

I have  the  fertilizer  prices,  but  I will  not  take  the  time  to  go  over 
them. 

Mr.  Jones.  The  prices  that  the  packers  receive  ? 

Mr.  Wilson.  That  is  the  wholesale  selling  price. 

Mr.  Jones.  That  is  your  selling  price  ? 

Mr.  Wilson.  Yes,  sir. 

Mr.  Kincheloe.  Have  you  ever  seen  a time  in  your  experience 
where  there  was  as  great  a spread  in  the  price  of  meat  from  the  pro- 
ducers to  the  consumers  as  now  ? 

Mr.  Wilson.  Yes;  I think  there  has  been  a time  in  the  recent  past 
when  the  spread  was  probably  greater  than  now. 

Mr.  Kincheloe.  That  is  since  the  war  ? 

Mr.  Wilson.  Yes,  sir. 

Mr.  Kincheloe.  But  not  before  the  war? 

Mr.  Wilson.  Oh,  no. 

Mr.  Kincheloe.  What  do  you  attribute  that  to  ? 

Mr.  Wilson.  That  is  a big  story,  a mighty  important  proposition. 
I do  not  think  that  it  is  thoroughly  understood  by  us. 

Mr.  Kincheloe.  I have  confidence  in  your  ability  along  this  line, 
and  that  is  the  reason  I am  asking  these  questions. 

Mr.  Wilson.  Of  course,  that  goes  immediately  to  the  question  of 
the  retailer,  that  is  the  problem.  There  is  a great  deal  to  be  said  on 
both  sides  of  the  proposition.  I think  that  is  one  of  the  questions 
that  needs  immediate  consideration  on  the  part  of  the  Government 
or  any  agency  of  the  Government  that  may  undertake  the  work. 
There  is  an  argument  on  both  sides.  Of  course,  I am  satisfied  that 


406 


MEAT  PACKER. 


in  some  cases  there  have  been  abuses.  I am  also  of  the  opinion  that 
in  some  cases  the  retailers  have  been  condemned  improperly. 

Mr.  Tincher.  Have  you  a house  here,  Mr.  Wilson  ? 

Mr.  Wilson.  Yes,  sir. 

Mr.  Tincher.  When  you  sell  meat  to  a retailer  do  you  indicate  to 
him  in  any  way  that  you  think  he  should  retail  it  at  a reasonable 

Erice,  or  do  you  feel,  perhaps,  that  he  might  go  to  one  of  the  other 
ouses  and  buy  his  meat  ? 

Mr.  Wilson.  I do  not  think  that  would  cut  much  figure  in  where 
he  would  buy.  I think  it  has  been  the  idea  of  the  packers  to  encourage 
the  retailers  as  far  as  possible  to  meet  this  situation  and  meet  it  in 
a price  way,  as  far  as  they  are  able.  We  have  advocated  that. 
We  have  had  meetings  with  the  retailers  and  we  have  urged  that 
upon  them  repeatedly. 

Mr.  Ten  Eyck.  Mr.  Wilson,  you  made  a statement  that  it  was  a 
problem  with  the  producer  to  solve  by  so  regulating  his  business 
and  cheapening  the  cost  of  production.  Do  you  not  think,  while  it 
may  be  in  a general  way  the  problem  of  the  producer,  that  the  biggest 
chance  for  the  greatest  saving  is  after  it  has  left  the  packer’s  house, 
between  the  selling  price  of  the  packer  and  the  purchasing  price  of  ■ 
the  public?  That  seems  to  be  the  largest  spread.  Of  course,  in 
a general  way  you  can  get  the  most  out  of  the  greatest  ? 

Mr.  Wilson.  Very  naturally.  As  I say,  that  is  a big  problem.  , 
I think  it  is  one  that  needs  very  careful  consideration  and  complete 
study  of  the  whole  situation.  I did  not  want  to  convey  the  idea  that  < 
the  problem  with  the  producer  was  not  one  that  we  were  interested  * 
in,  but  I did  want  to  convey  this  thought,  that  the  control,  if  possible,  ; 
of  the  shipment  of  live  stock  into  the  market,  making  it  more  uni-  : 
form,  would  have  more  to  do  with  the  elimination  of  the  complaints 
of  the  producers  than  anything  that  the  packers  could  possibly  do.  ■ 
That  is  not  in  our  hands  and  we  can  not  control  it.  We  should  like  ■ 
an  opportunity  to  cooperate  with  the  producer  in  that  direction,  ] 
but  we  have  not,  up  to  date,  had  much  of  an  opportunity  to  do  that,  i 
If  you  like,  I will  discuss  that  with  you  a little  further  later  on. 

Mr.  As  well.  No  one  has  yet  suggested  any  plan  to  handle  the 
spread  of  the  retailer  and  nobody  has  suggested  any  governmental  1 
activity  that  would  be  successful  ? 

Mr.  Wilson.  I did  not  hear  Secretary  Wallace  yesterday,  but  I 
did  run  through  his  statement  in  the  record  and  I think  he  indicated 
very  clearly  the  need  of  a better  understanding  of  the  retail  situation. 
Mr.  Aswell.  He  did,  but  he  did  not  suggest  a way  to  meet  it. 

Mr.  Wilson.  I think  it  is  dangerous  to  undertake  a cure  without 
knowing  the  disease.  I think  that  was  Mr.  Wallace’s  idea  and  it  is 
certainly  my  idea,  that  we  can  not  cure  these  evils  until  we  know 
the  causes  and  the  fundamental  surroundings.  I think  that  is  the 
great  danger  in  this  problem. 

Mr.  Tincher.  I think  the  record  should  show  as  to  the  last  question 
that  the  regulation  of  the  industry  will  cure  that. 

Mr.  Aswell.  My  question  referred  to  the  retailer. 

Mr.  Tincher.  I think  the  idea  in  every  one  of  these  bills  is  that 
the  enactment  of  these  measures  into  law  would  absolutely  cure  the 
proposition.  While  it  does  not  mention  the  retailer  it  controls  the 
industry  and  would  regulate  the  evil. 


MEAT  PACKER. 


407 


Mr.  Creigh.  Is  that  a bill  before  the  committee  ? 

Mr.  Tincher.  That  is  the  understanding  of  the  proponents  of  the 
bill. 

Mr.  Creigh.  What  bill  ? 

Mr.  Tincher.  The  Haugen  bill  and  the  Williams  bill  both  claim 
that  it  controls  the  product. 

The  Chairman.  It  controls  them  as  far  as  the  packer  is  concerned. 

Mr.  Aswell.  Does  your  bill  propose  to  control  the  retail  price  ? 

The  Chairman.  No,  sir. 

Mr.  Tincher.  If  your  bill  does  not  control  the  industry  it  is  not  a 
good  bill.  Mr.  Anderson  spent  a lot  of  time  and  I thought  he  made 
everyone  understand  that  the  importance  of  this  legislation  was  to 
control  the  industry.  I do  not  know.  I may  have  to  draw  a bill 
if  these  gentlemen  disclaim  any  merit  for  their  measures. 

The  Chairman.  This  is  a bill  to  regulate  the  packers. 

Mr.  Ten  Eyck.  Let  us  get  down  to  business. 

Mr.  Wilson.  I will  call  your  attention  to  some  of  the  declines.  I 
set  forth  at  this  point  some  figures  of  wholesale  meat  prices  taken 
from  the  Bureau  of  Labor  Statistics  of  the  United  States  Bureau  of 
Markets.  It  shows  a decline  in  prices  in  March,  1921,  from  the  prices 
of  March,  1920,  as  follows: 

Fresh  beef,  33  per  cent;  salt  beef,  52  per  cent;  bacon,  short  clear 
sides,  50  per  cent;  hams,  smoked,  loose,  15  per  cent;  lard,  prime 
contract,  56  per  cent;  pork,  salt  mess,  40  per  cent;  mutton,  dressed, 
46  per  cent. 

Wholesale  meat  prices. 


Unit. 

1913, 
average 
for  year. 

April,1 

1918, 

price. 

March, 

1919, 

price. 

March, 

1920, 

price. 

March, 

1921, 

price. 

Per  cent 
decrease 
from 
March, 
1919. 

Beef,  fresh,  good  native 

steers, 
.per  pound.. 

$0.13 

$0. 203 

$0. 245 

$0. 205 

$0. 163 

33 

Beef,  salt,  extra  mess 

.per  barrel. . 

IS.  923 

31. 90 

35. 50 

17.00 

17. 00 

52 

Bacon,  short,  clear  sides 

.per  pound. . 

.127 

.293 

.305 

.211 

.154 

50 

Hams,  smoked,  loose 

do.... 

.166 

.295 

.338 

.316 

.273 

19 

Lard,  prime,  contract 

do I 

.11 

.25 

.28 

.21 

.122 

56 

Pork,  salt,  mess 

.per  barrel. . 

22. 471 

50.40 

50. 125 

42. 30 

30.10 

40 

Mutton,  dressed 

per  pound.. 

.103 

.192 

.214 

.196 

.116 

46 

1 March,  1918,  figures  not  available.  Source:  The  Bureau  of  Labor  Statistics  of  the  United  States  Bureau 
of  Markets. 


Do  not  all  these  facts  demonstrate  that  the  packer  can  not  and 
does  not  control  the  market  prices  ? 

Many  meats  not  quoted  by  the  Bureau  of  Labor  Statistics  have 
also  declined.  There  are  a number  of  other  reasons  for  the  declines 
which  are  reflected  in  live-stock  prices.  I have  already  mentioned 
the  terrific  reduction  in  the  foreign  demand  for  meat  products. 
Other  causes  include  a decrease  in  meat  consumption  per  capita, 
increase  of  unemployment  and  the  consequent  decrease  in  purchasing 
power  and  consumption  demand,  and  above  all  the  general  decline 
in  commodity  values  and  the  general  process  of  deflation  which  has 
affected  every  industry. 

I point  out  in  passing  that  consumption  per  capita  of  meat  and 
lard  in  the  United  States  last  year,  1920,  was  13  pounds  less  than  in 
1918.  (163.3  as  compared  with  154.3),  a decrease  of  13  pounds  per 

person  in  the  United  States  during  that  period. 


408 


MEAT  PACKER. 


Mr.  Kincheloe.  How  do  you  account  for  that,  Mr.  Wilson,  the 
depression  in  business  ? 

Mr.  Wilson.  That  is  one  factor.  I think  there  are  many  con- 
tributing factors.  I think  the  constant  agitations  have  had  some- 
thing to  do  with  this,  a great  deal. 

This  decrease  represents  a loss  in  consumption  of  1,365,000,000 
pounds  of  potential  consumption  on  the  basis  of  our  population  in 
1920. 

It  is  from  this  standpoint  that  the  whole  question  should  be 
studied.  As  now  organized,  we  have  a highly  efficient  industry 
which  with  enterprise,  unfailing  efficiency  and  a very  low  rate  of 
profit,  is  processing  and  distributing  so  as  to  be  available  to  the  con- 
suming public,  the  farmers’  raw  material  purchased  in  the  form  of 
live  stock. 

The  interest  of  the  producers  is  so  closely  interwoven  with  that  of 
the  packers,  that  what  is  injurious  to  one  is  bound  to  prove  harmful 
to  the  other.  There  have  been  numerous  bills  introduced  in  Con- 
gress during  the  last  two  years  attempting  to  provide  some  addi- 
tional control  or  regulation  for  the  packers.  I will  not  attempt  to 
analyze  these  different  bills,  but  will  only  make  reference  to  them  in  * 
order  that  we  may  review  the  different  phases  exhibited  by  these  « 
several  attempts  to  find  a legislative  solution  for  the  economic  prob-  ; 
lems  I have  presented  to  you. 

The  first  bills  introduced  were  the  Sims-Kenyon  bill,  proposing 
Governmental  ownership  and  operation  of  stockyards,  refrigerator  1 
cars,  cold  storage,  and  branch  houses,  and  a license  system  for  the  j 
government  of  the  packers.  Popular  opinion  soon  condemned  the  ; 
provisions  of  these  measures. 

Next,  the  Kenyon,  Kendrick,  Anderson  bills  were  offered.  They  . 
provided  for  a license  system,  a divorcement  of  packer  interest  in  j 
stockyards  and  very  drastic  regulations  of  the  details  of  the  business,  j 
Again,  popular  sentiment  convinced  Congress  that  the  American  j 
people  were  unwilling  to  fasten  upon  private  business  a system  sus-  I 
ceptible  of  autocratic  governmental  domination  and  official  despotism,  i 
as  distinguished  from  that  freedom  of  action  and  private  initiative  in  ] 
business  so  essentially  necessary  to  its  success.  Even  the  American  ' 
National  Live  Stock  Association,  which  inaugurated  the  agitation 
and  has  maintained  the  fight  for  legislation,  has  abandoned  the 
idea  of  a license  system  under  which  arbitrary  powers  could  have 
been  exercised. 

The  Norris  bill,  which  has  been  introduced  also  before  this  Com- 
mittee by  Mr.  McLaughlin  of  Nebraska,  in  my  opinion  goes  beyond 
the  present  demands  of  the  American  National  Live  Stock  Associa- 
tion, and  many  other  associations  representing  the  live  stock  interests- 
and  farm  interests  in  this  country. 

Mr.  Jones.  Which  bill  is  that? 

Mr.  Wilson.  The  McLaughlin  bill,  the  McLaughlin-Norris  bill. 

Mr.  Thompson.  The  Norris  bill? 

Mr.  Wilson.  Yes,  sir. 

It  creates  a new  Federal  commission,  to  which  is  delegated  legis- 
lative, judicial,  and  executive  powers  of  the  most  arbitrary  and  indefi- 
nite character,  in  conflict  with  the  policy  announced  by  President 
Harding  in  his  campaign  of  "less  Government  in  business  and  more 
business  in  Government.” 


MEAT  PACKER. 


409 


The  commission  created  by  that  bill  will  be  the  lawmaker,  the  judge, 
and  the  administrator  and  would  have  power  never  before  vested  in 
any  governmental  agency  for  the  control  of  private  business  in  time 
of  peace.  It  embodies  a most  dangerous  precedent,  is  un-American 
in  principle,  and  a radical  departue  from  the  time-honored  traditions 
of  our  country  in  its  relation  to  the  business  of  its  citizens. 

In  fact,  the  whole  scheme  of  legislation  seems  to  be  predicated  upon 
the  idea  of  penalizing  the  packers  for  some  unproven  and  imaginary 
offense  of  the  past  or  to  shackle  them  because  of  the  fear  that  they 
may  exercise  some  illegal  power  in  the  future.  In  opposing  the  enact- 
ment of  such  legislation  we  feel  that  we  are  performing  a service  in 
the  interest  of  the  producers  and  consumers  as  well  as  for  industry  in 
general. 

This  bill  does  not  deal  with  the  fundamental  problems  of  the  pro- 
ducer in  any  particular,  and  consequently  will  not  do  away  with  the 
unrest  and  dissatisfaction  which  has  been  stirred  up  over  this  ques- 
tion, and  when  the  producers  fully  realize  this  I feel  that  they  will 
justify  our  opposition  to  this  measure. 

I fear  that  the  advocates  of  legislation  of  this  character  have  lost 
sight  of  the  real  issue  which  prompted  this  movement  for  legislation. 
Instead  of  proposing  constructive  legislation  to  solve  the  problems  of 
the  producers  and  feeders  of  live  stock  and  of  the  retail  distributors 
of  the  products  they  are  attempting  by  restrictive  legislation  that 
which  I fear  will  merely  handicap  the  packers. 

President  Heard,  of  the  American  National  Live  Stock  Association, 
in  his  very  able  address  to  his  association  at  Cheyenne,  Wyo.,  in 
January,  1917,  said: 

To  my  mind  what  we  need  is  the  proper  balancing  of  this  entire  industry  so  that 
each  group  of  men  engaged  therein  may  receive  the  just  reward  for  the  energy,  effi- 
ciency, and  thoroughness  with  which  they  conduct  their  branch  of  the  business,  and 
the  consumer  obtain  thoroughly  wholesome  meat  at  a price  based  solely  upon  the 
economic  law  of  supply  and  demand  and  free  from  speculation,  waste,  manipulation, 
or  inefficiency  in  management. 

This  states  very  clearly  the  problem  to  be  solved. 

As  I have  heretofore  pointed  out,  there  is  no  efficient  system  of 
regulating  the  flow  of  live  stock  to  the  markets.  The  producer  does 
not  regulate  the  marketing  operations  by  the  law  of  supply  and 
demand,  nor  does  he  attempt  to  distribute  his  shipments  to  markets 
so  as  to  produce  a fairly  uniform  flow  in  accordance  therewith.  Yet 
the  packers  are  expected  to  absorb  all  that  is  sent  to  market  in  what- 
ever quantities,  at  whatever  times,  to  pay  cash  on  the  spot,  and  then 
it  is  up  to  them  to  induce  the  retailers  to  take  the  products.  There  is 
nothing  in  the  proposed  bill  that  attempts  to  solve  this  great  funda- 
mental problem.  The  packers  realize  the  importance  of  this  question 
and  would  welcome  some  constructive  policy  that  would  put  the 
industry  upon  a sounder  economic  basis,  one  that  will  encourage  its 
continuation  and  stimulate  its  growth.  They  would  gladly  cooperate 
in  any  movement  that  would  legally  produce  such  a result. 

Among  the  reasons  why  we  think  the  enactment  of  the  Norris- 
McLaughlin  bill  unwise,  inexpedient,  and  unnecessary  may  be 
mentioned  the  following : 

First.  The  measure  does  not  deal  with  or  solve  the  economic 
problems  of  the  producing  and  consuming  public  or  of  the  packer. 


410 


MEAT  PACKER. 


Second.  The  bill  delegates  arbitrary  powers  contrary  to  the  spirit 
of  American  institutions  and  the  resolutions  adopted  by  many  of 
the  producers  and  farm  organizations  throughout  the  country. 

Third.  The  bill  sets  up  a form  of  governmental  despotism  over 
private  business  which  would  be  destructive  of  private  initiative 
and  individual  enterprise. 

Fourth.  The  bill  creates  another  governmental  commission  whose 
principal  duties  will  be  to  duplicate  much  of  the  work  already  being 
performed  by  the  Department  of  Agriculture  and  other  agencies. 

Fifth.  The  duplication  of  this  work  will  cost  enormous  sums, 
without  benefits  to  the  producer  or  consumer,  and  will  lead  to  con- 
flicting authority,  endless  confusion,  and  constant  uncertainty  in 
the  direction  of  our  business. 

Sixth.  The  bill  delegates  legislative,  judicial,  and  executive  power 
to  a commission  to  make  and  enforce  rules,  regulations  and  orders, 
having  the  force  and  effect  of  law,  to  govern  private  business  con- 
trary to  principles  of  American  institutions,  and  the  announced 
policy  of  the  present  administration  of  our  Government. 

Seventh.  The  bill  gives  to  a commission  the  power  to  limit  the  num- 
ber and  kind  of  articles  that  may  be  handled  by  a private  business, 
contrary  to  the  State  laws  and  the  spirit  of  American  freedom. 

Eighth.  The  bill  gives  the  commission  the  power  to  name  the  con-  ; 
ditions  under  which  the  packers  shall  take  title  to  any  commodity  \ 
purchased  by  them,  which  power  I fear  can  be  used  to  fix  the  prices 
of  live  stock  without  any  corresponding  power  to  force  the  consumer 
to  buy  the  products  at  a price  to  justify  it  or  to  compensate  the 
packer  for  any  losses  sustained  in  obeying  the  orders  of  the  com- 
mission. 

The  packing  industry  is  already  supervised  and  regulated  by  more 
laws,  Federal,  State  and  municipal,  than  any  other  industry  in  this 
country.  The  Federal  Trade  Commission  has  power  to  inspect  our 
books  and  records  and  ascertain  every  fact  of  public  interest;  ascer- 
tain whether  our  profits  are  reasonable,  whether  our  business  is  con-  < 
ducted  efficiently,  economically  and  fairly  to  all  persons  with  whom 
we  deal,  including  our  competitors.  It  also  has  the  power  to  prevent 
unfair  methods  of  competition  and  to  gather  and  compile  informa- 
tion concerning,  and  to  investigate  from  time  to  time,  the  organiza- 
tion, conduct,  practices,  and  management  of  our  business,  and  may 
require  reports  and  answers,  under  oath  or  otherwise,  as  often  as  it 
may  deem  necessary  concerning  all  such  matters.  It  may  also 
require  the  attendance  of  witnesses  and  the  production  of  books, 
papers,  and  documentary  evidence.  It  has  the  power  to  prevent 
packers  from  discriminating  in  price  between  different  purchasers 
of  our  products  where  the  purpose  might  be  in  any  respect  unlawful. 

The  Department  of  Justice  has  the  power  to  enforce  existing  laws 
against  illegal  combinations,  if  any  existed  in  this  industry. 

The  Secretary  of  Agriculture  has  the  power  under  existing  law  to 
gather  and  promulgate  information  relating  to  the  demand  for, 
supply,  consumption,  costs  and  prices  of,  and  the  facts  relating  to 
production,  manufacture,  storage,  and  distribution  of  live  stock  and 
live  stock  products  and  other  commodities  handled  by  the  packers. 

The  Federal  Trade  Commission,  the  Attorney  General,  and  the 
Department  of  Agriculture  have  the  power  to  do  practically  every- 
thing authorized  in  the  Norris-McLaughlin  bill  under  the  laws  now 


MEAT  PACKER. 


411 


in  force,  and  for  the  enforcement  of  which  millions  of  dollars  have 
already  been  appropriated,  except  that  no  Congress  has  ever  yet 
delegated  to  them  the  powers  to  make  arbitrary  rules  and  regulations, 
interfering  and  hindering  the  efficient  operation,  or  to  limit  the 
growth  and  extent  of  private  business  such  as  are  contained  in  that 
particular  bill. 

Among  the  numerous  laws  already  in  force  supervising  and  regu- 
lating the  packing  business  may  be  mentioned  the  following:  Federal 
antitrust  acts;  Federal  Trade  Commission  acts:  Federal  pure  food 
acts;  Federal  meat  inspection  act;  Federal  oleomargarine  act; 
Federal  butter  act;  Federal  labor  acts;  Federal  internal-revenue 
acts;  Federal  income  and  excess-profits  laws;  Interstate  Commerce 
Commission  regulations;  Department  of  Agriculture  regulations: 
State  antitrust  laws;  State  corporation  laws;  State  public  utilities  re- 
gulations; State  inspection  laws;  State  oleomargarine  laws;  State 
butter  laws;  State  cold-storage  laws;  State  pure-food  laws;  State 
sanitary  laws  and  regulations;  State  fertilizer  laws;  State  feedstuff 
Jaws;  State  labor  laws;  State  tax  laws;  State  industrial  court  laws; 
city  inspection  laws;  city  sanitary  laws;  and  city  tax  laws. 

This  list  does  not  exhaust  the  subject  but  is  a fair  example  of  the 
extent  to  which  this  industry  is  now  supervised  by  laws. 

I have  heretofore  before  the  committees  of  Congress  and  in  ad- 
dresses made  before  live-stock  associations,  stated  as  my  personal 
view  that  I have  no  objection  to  reasonable  supervision  that  will 
enable  the  Government,  producers,  and  the  public  to  know  at  all 
times  whether  our  business  is  run  efficiently  and  economically  and 
whether  our  profits  are  reasonable  and  whether  our  treatment  of 
our  competitors  and  the  public  is  fair.  But  I feel  it  my  duty  as  the 
representative  of  this  great  industry  and  as  an  American  citizen 
interested  in  the  future  welfare  and  development  of  our  country  to 
oppose  bills  which  I know  from  my  own  experience  of  more  than 
30  37ears  in  this  industry  will  be  harmful,  destructive,  and  of  no 
benefit  to  the  interests  which  it  is  designed  to  help. 

We  must  bear  in  mind  that  we  have  gone  through  a great  war. 
The  world  is  still  in  a state  of  upheaval.  Conditions  are  still  unsettled, 
adjustments  must  be  made  to  new  conditions  before  industry  can 
become  normal.  There  has  never  been  a time  in  the  history  of  the 
world  when  conservative,  thoughtful  and  constructive  wisdom  was 
more  necessary.  Why  not  remove  some  of  the  legal  impediments  to 
fair  cooperation  ? 

Let  us  not  be  carried  adrift  into  new  and  dangerous  experiments. 

Mr.  Tincher.  What  was  that  word  you  used — “corroboration” 
or  “cooperation”  ? 

Mr.  Wilson.  “Cooperation.  Why  not  remove  some  of  the  legal 
impediments  to  fair  cooperation?” 

Your  Volstead  Act,  for  instance. 

Mr.  Williams.  “Competition”  would  not  be  a bad  word;  there 
are  impediments  to  fair  competition  ? 

Mr.  Wilson.  Absolutely. 

Mr.  Williams.  Do  you  think  that  the  Volstead  Act  passed  by  the 
House  is  a good  law  ? 

Mr.  Wilson.  I do  not  know.  I am  not  lawyer  enough  to  say 
whether  it  is  a good  law;  I think  the  principle  is  good. 


412 


MEAT  PACKER. 


Mr.  Tinciier.  The  reason  I asked  you  about  the  word  “coopera- 
tion” is  that  whenever  the  Government  decides  that  Government 
supervision  is  necessary,  is  it  not  rather  inconsistent  to  have  Govern- 
ment supervision  of  an  industry  with  laws  preventing  cooperation? 

Mr.  Wilson.  I am  sure  there  will  be  a conflict  there,  and  that  we 
should  undertake  to  bring  about  proper  cooperation  between  the 
different  branches  of  the  industry. 

Mr.  Tincher.  Along  that  line,  when  the  Government  took  charge, 
it  was  necessary  to  absolutely  ignore  any  laws  preventing  coopera- 
tion among  the  principal  dealers  in  that  product  in  the  United 
States,  was  it  not  ? 

Mr.  Wilson.  Well,  I know  in  some  cases  that  was  done  and  those 
laws  were  ignored.  The  packers  are  a little  gunshy  on  the  antitrust 
laws.  We  at  one  time  took  the  position  with  Mr.  Hoover  that  we 
were  fearful  even  of  the  meeting  he  was  calling  in  his  office,  fearful 
that  some  attorney  general  might  later  on  say,  “Why,  even  those 
meetings  were  in  violation  of  the  Sherman  Act  and  I am  going  to 
prosecute  you,”  and  Mr.  Hoover  took  the  matter  up  with  the 
President  and  the  President  submitted  a letter  to  him,  in  effect, 
requiring  us  to  go  on  and  cooperate  in  that  way;  that  it  was  a war 
measure  and  we  must  do  what  the  Food  Administrator  wanted 
done,  in  spite  of  anything  we  might  think  to  the  contrary. 

Mr.  Tincher.  That  is  what  I had  in  mind.  We  used  to  hear  con- 
siderable about  competition  among  the  common  carriers  and  then 
the  Government  decided  it  was  necessary  to  have  supervision  over 
the  common  carriers,  and  the  Interstate  Commerce  Commission 
through  its  powers  has  absolutely  taken  the  common  carriers  out 
of  any  antitrust  laws  provision. 

Mr.  Wilson.  I think  so;  pretty  much. 

Mr.  Tincher.  It  has  been  necessary  to  do  that.  Now,  here  is 
what  I am  getting  at:  Forget  the  packers,  forget  the  producers,  and 
forget  the  consumers  and  simply  think  of  the  meat  industry.  A 
great  many  people  think  it  is  necessary  to  have  Government  super- 
vision of  that  proposition  because  of  the  fact  that  you  know  and  I 
know  that  you  cannot  produce  meat  at  the  present  prices;  and  you 
know  and  I know  that  during  the  war  they  were  patriotic  during 
those  three  months  you  mentioned,  and  the  producers  had  actually 
produced  the  meat  so  that  you  could  furnish  it  to  the  foreign  Gov- 
ernments at  the  request  of  Mr.  Hoover.  They  had  all  taken  their 
sows  out  of  the  fattening  pen  and  when  the  request  was  made  a 
year  or  so  ago  that  meat  was  available  for  you,  but  their  margin 
of  profit  on  that  meat,  by  reason  of  the  increased  cost  of  the  products 
they  had  to  feed  those  animals,  was  very  small. 

Mr.  Wilson.  I do  not  think  he  got  any  too  much. 

Mr.  Tincher.  And  since  the  war  their  product  has  been  the  first 
to  go  below  prewar  prices. 

Mr.  Wilson.  He  did  what  the  Government  and  what  the  Food 
Administration  and  everybody  else  asked  him  to  do.  He  increased 
his  production  to  the  maximum,  and,  on  the  other  hand,  the  Food 
Administrator  asked  the  people  to  stop  eating  meat. . That  is  the 
position  that  the  war  left  the  packer  and  this  industry  in.  The  con- 
sumer, on  the  one  side,  was  curtailing  the  consumption  and  the  pro- 
ducer, on  the  other  side,  was  at  the  maximum  of  production,  and 
our  exports  of  war  supplies  and  everything  were  violently  reduced. 


MEAT  PACKER. 


413 


Mr.  Tincher.  Here  is  what  I am  getting  at 

Mr.  Wilson  (interposing).  Now,  just  let  me  finish,  please.  On 
top  of  that  our  Government  had  millions  and  millions  of  pounds  of 
fresh  meats  and  canned  meats  and  everything  else  in  storage,  and 
different  from  what  they  did  in  many  industries,  to  satisfy  apparently 
public  clamor,  they  insisted  on  throwing  that  stuff  on  the  market  in 
competition  with  what  the  farmer  produced  at  the  request  of  the 
Government,  as  a patriotic  duty;  they  threw  that  stuff  on  the 
market  at  prices  that  spelled  ruination  to  the  man  who  was  making 
that  fight  on  the  farm  foy  the  country  at  the  Government’s  request. 

Mr.  Tincher.  We  are  absolutely  in  accord  as  to  that  situation. 
Now,  let  me  see  if  I can  make  myself  clear  on  this  proposition.  Su- 
pervision of  this  industry,  to  be  a success,  must  necessarily  involve 
the  right  in  the  supervisor  to  enforce  cooperation. 

Mr.  Wilson.  Well,  I do  not  know  as  I would  necessarily  have  to 
go  as  far  with  you  as  the  word  “ enforce,”  but  I will  say  this  to  you, 
and  to  all  you  men:  You  might  just  as  well  save  your  time  and  quit 
further  effort  in  this  direction  if  the  result  of  anything  you  do  does 
not  mean  cooperation  between  the  elements  of  this  industry.  You 
might  just  as  well  save  your  time,  because  it  is  not  within  the  power 
of  man  to  legislate  a cure  of  this  situation.  It  may  do  one  thing, 
and  if  it  does  do  that  I think  it  may  be  justified.  If  it  will  bring 
about  cooperation  and  make  it  possible,  which  has  not  been  possible 
up  to  the  present  time  because  of  many  reasons,  the  principal  one  is 
the  fact  that  the  producers  felt  that  they  could  not  afford  to  cooper- 
ate with  us  while  they  were  agitating  legislation  in  Congress;  that 
they  could  not  afford  at  that  time  to  cooperate  because  they  thought 
it  might  have  some  effect  on  getting  some  bill  through,  and  a lot  of 
them,  the  leaders  particularly,  who  undertook  to  speak  for  the  pro- 
ducers, had  the  idea  that  if  they  worked  with  the  packers  it  might 
defeat  that  purpose. 

Mr.  Tincher.  I do  not  know  whether  you  catch  my  proposition. 
My  proposition  is  that  if  the  price  of  meat  to-day  was  in  accord  with 
the  price  of  the  live  animal,  the  producer  would  receive  a better  price 
for  his  animal  and  more  meat  would  be  consumed  in  the  United  States 
and  the  market  would  be  better.  If  we  are  going  to  regulate  this 
industry  and  supervise  this  industry,  my  contention  is  that  the  super- 
visor must  have  authority  to  permit,  if  not  enforce,  cooperation.  I 
have  this  in  mind:  I know  you  can  not  control  the  price  of  your 
product  to  the  consumer,  because  the  minute  you  try  to  do  that  or 
try  to  influence  the  price  of  your  product  to  the  consumer,  under 
existing  conditions,  you  would  force  a consent  decree,  first,  and  then 
you  would  force  competition  with  which  you  can  have  no  cooperation 
by  reason  of  another  law,  which  would  make  you  a criminal  if  you 
tried  to  do  that. 

Mr.  Wilson.  That  is  true. 

Mr.  Tincher.  I think  we  might  just  as  well  face  the  proposition, 
and  I say,  as  the  gentleman  so  well  suggested  a while  ago,  if  these 
bills  do  not  contemplate  permitting  the  supervisor  to  permit  coopera- 
tion or  enforce  cooperation — perhaps  I should  not  go  so  far  as  to  say 
enforce  cooperation — but  to  permit  cooperation  in  carrying  the  prod- 
uct to  the  consumer,  then  the  bills  are  inadequate  in  that  respect  and 
we  might  just  as  well  face  it  like  little  men  and  fix  them  up. 


414 


MEAT  PACKER. 


Mr.  Wilson.  I fully  agree  with  you,  but  not  maybe  to  the  extent 
of  cooperation  that  might  necessarily  mean  a violation  of  any  of  the 
pending  antitrust  bills.  I think  cooperation  of  the  proper  kind  might 
be  had,  for  instance,  under  the  Department  of  Agriculture,  that  would 
work  out  a lot  of  the  problems  that  are  present  in  this  situation,  first, 
by  getting  a clearer  understanding  of  the  problems,  having  each 
understand  the  problems  of  the  other,  which  they  do  not  to-day,  and 
then  together  eliminating  a lot  of  the  problems  that  can  easily  be 
eliminated.  But  they  can  only  be  eliminated,  in  my  opinion,  by  the 
proper  spirit  displayed  on  the  part  of  all,  having  due  regard  for  the 
great  mass  of  people,  the  consumers  in  tliis  country,  not  injuring 
their  position  in  any  way,  but  helping  them,  and  at  the  same  time 
helping  the  industry. 

Mr.  Tincher.  I agree  with  you.  I do  not  think  the  laws  that  are 
passed  to  prohibit  combinations  in  restraint  of  trade  are  a success  so 
long  as  they  are  only  applied  for  the  purpose  of  prohibiting  combina- 
tions to  accelerate  our  trade. 

Mr.  Wilson.  There  was  a good  deal  of  discussion  here  with  regard 
to  the  Grosscup  injunction  on  yesterday,  which  was  very  interesting. 

I did  not  want  to  open  that  question  up,  and  I do  not  want  to  proph- 
esy, but  I believe  that  the  time  will  come  when  there  will  be  some 
sort  of  a regulation,  through  cooperation  or  otherwise,  of  the  ship-  I 
ments  of  these  extremely  perishable  articles  into  the  consuming  ter-  s 
ritories.  Now,  that  will  not  necessarily  enhance  the  price  at  all. 

It  does  not  have  to.  It  will  help  the  consumer  and  it  will  help  the  ] 
producer.  , 

Mr.  Purnell.  Mr.  Wilson,  your  idea  is,  then,  that  you  ought  to 
have  voluntary  cooperation  rather  than  one  that  is  an  attempt  to 
enforce  cooperation. 

Mr.  Wilson.  I would  say,  maybe,  one  with  the  power  to  enforce 
if  it  did  not  conflict  with  the  antitrust  laws. 

Mr.  Purnell.  My  idea  is  that  the  fact  that  this  supervision  is 
placed  in  the  hands  of  the  Secretary  of  Agriculture  is  the  chief  asset 
of  all  these  proposed  measures,  for  the  reason  that  it  gives  the  Secre- 
tary of  Agriculture  the  power  and  the  right  to  go  into  this  matter 
in  an  unbiased  and  unprejudiced  manner,  and  to  clear  up  a lot  of 
misunderstandings.  You  can  not  have  voluntary  or  enforced  coop- 
eration as  long  as  there  is  a feeling  on  the  part  of  the  producers  of 
this  country  that  something  is  wrong  that  they  do  not  understand. 

If  I have  understood  you  correctly,  I think  your  idea  is  just  along 
that  line. 

Mr.  Wilson.  As  soon  as  I am  through  with  this  statement,  I will 
be  glad  to  give  you  my  idea  which  I think  will  answer  your  question. 

The  Chairman.  You  prefer  to  conclude  your  statement  ? 

Mr.  Wilson.  I am  through  with  the  exception  of  just  one  para- 
graph, and  I would  like  to  finish  that. 

The  experiences  patriotically  endured  during  a period  of  war  when 
civilization  was  in  the  balance,  has  taught  us  many  lessons  which 
should  serve  as  valuable  guides  for  the  future. 

The  difficulty  you  have  encountered  heretofore  in  framing  a bill 
and  the  different  features  that  have  been  embodied  in  the  several 
measures  offered  is  proof  of  the  fact  that  a solution  of  the  real  prob- 
lems involved  is  most  difficult  to  obtain  and  can  not  be  found  by  the 
mere  enactment  of  drastic  regulations  that  will  take  away  the  judg- 


MEAT  PACKER. 


415 


ment  and  wisdom  of  those  who  have  made  this  great  industry  a 
success.  A better  understanding  of  each  others’  difficulties  and  a 
more  cordial  spirit  of  appreciation  and  good  will  between  the  several 
branches  of  the  industry,  with  closer  cooperation  in  eliminating 
the  unscientific  and  uneconomic  methods  wherever  employed,  would 
come  nearer  affecting  a solution  of  this  great  question. 

Mr.  Ten  Eyck.  Right  there,  I would  like  to  ask  you  a question. 
From  your  knowledge  of  the  trade  and  after  listening  to  the  previous 
hearings,  do  you  think  it  possible  to  give  to  the  government  agents 
any  additional  authority  over  what  they  now  have  ? 

Mr.  Wilson.  I do  not  want  to  go  into — and  I think  you  gentlemen 
will  appreciate  that  I have  avoided  any  reference  to  the  Federal 
Trade  Commission.  I do  not  want  to  get  into  that  because  I think 
that  now  is  aside  the  question.  I think  we  are  now  up  to  this  point, 
and  I am  willing  to  concede  this : There  is  a state  of  mind  at  present 
with  the  public  and  with  the  producers  that  is  detrimental  to  this 
industry.  Whether  that  state  of  mind  is  based  on  facts  or  not,  it 
is  a prejudice  and  prejudice  whether  based  on  fact  or  fancy  is  equally 
harmful.  Now,  I have  reached  the  point  in  my  mind  where  I per- 
sonally think — and  when  I say  that  I do  not  necessarily  speak  for 
all  of  the  packers — but  I personally  think  that  we  have  reached  the 
time  when,  if  some  legislation  can  be  worked  out,  that  will  lead 
toward  clearing  the  public  mind  of  such  prejudice,  that  it  would  be 
very  desirable  from  the  standpoint  of  the  packers,  and  I believe  that 
all  of  the  packers  would  support  helpful,  constructive  legislation. 
Now,  I think  in  answer  to  your  question,  that  it  may  be  possible 
to  concentrate  some  supervisory  authority  in  one  agency  of  the  Gov- 
ernment, say,  for  argument’s  sake,  the  Department  of  Agriculture. 

I think  while  he  might  not  have  greater  power  than  could  be 
found  in  some  one  of  the  existing  laws  now  in  force  scattered  in 
different  departments,  I think  the  mere  fact  that  such  power  might 
be  vested  in  one  agency  might  in  itself  give  him  greater  power  to 
understand  this  whole  difficulty,  to  bring  these  different  branches  of 
this  industry  together,  and  to  work  out  the  things  that  are  seemingly 
irritating  the  situation. 

Mr.  Ten  Eyck.  You  anticipated  a second  question  but  have  not 
directly  answered  the  first  one.  I wanted  to  know  whether  you  feel 
it  was  in  the  power  of  Congress,  or  anyone  else,  to  give  larger  au- 
thority to  the  Government  agents  in  the  various  commissions  or 
departments  than  the  Government  had  now,  or  that  those  agents 
have  now;  and  that  being  the  case,  if  we  turned  all  over  under  one 
head,  could  we  not  obtain  cooperation  better  thereby  than  to  have  a 
multiplicity  of  people  continually,  from  different  viewpoints,  asking 
for  information  and  trying  to  regulate. 

Mr.  Wilson.  Yes,  I am  thoroughly  satisfied  as  to  the  latter. 
Whether  greater  power  could  be  given,  I presume  it  could,  I do  not 
know.  You  might  go  to  the  extent  of  Government  ownership  and 
establish  regulations  and  laws  that  would  cover  that  and  give  power 
under  that. 

Mr.  Ten  Eyck.  I do  not  think  we  are  anticipating  that. 

Mr.  Wilson.  Well,  you  will  have  to  do  that  to  satisfy  some  of  the 
advocates  of  packer  legislation.  I will  say  that. 

Mr.  Tincher.  Government  ownership  would  simply  deprive  the 
industry  of  probably  the  best  ability  in  the  world  along  this  line, 


416 


MEAT  PACKER. 


which  we  can  have  by  fair  Government  supervision  without  any 
Government  ownership. 

Mr.  Wilson.  Government  ownership  will  make  impossible  what 
has  been  accomplished  already  in  this  industry. 

Mr.  Jones.  There  is  nobody  here  advocating  Government 
ownership. 

Mr.  Wilson.  I am  not  arguing  for  that  point,  but  anything  that 
takes  away  the  initiative,  that  makes  it  impossible  for  the  people 
who  are  running  these  businesses,  to  do  what  the  great  founders  of 
these  businesses  did,  to  continue  what  they  started — I am  a great 
admirer  of  those  men,  in  spite  of  all  of  the  abuses  that  have  been 
heaped  upon  their  heads — I think  the  time  will  come  when  the 
American  people  will  put  them  in  a class  with  the  other  great  Ameri- 
can citizens  who  developed  this  country.  When  I say  that,  I mean 
the  originators  of  these  businesses,  Mr.  G.  F.  Swift,  Mr.  P.  D.  Armour, 
Mr.  Nelson  Morris,  Mr.  G.  F.  Sulzberger,  and  Mr.  Michael  Cudahy.  I 
think  the  time  will  come  when  the  work  that  those  men  did  in  taking 
from  the  cross  roads  country  slaughterhouse,  from  the  filthy,  insani- 
tary conditions  under  which  the  meat  food  products  of  this  country  . 
were  handled,  when  they  started  into  it,  when  the  by-products  out 
of  which  this  big  industry  has  been  budded  were  dumped  through  a ] 
hole  in  the  floor  to  the  hogs  underneath  in  the  most  unsatisfactory  5 
manner,  and  the  meat  handled  in  the  most  unsatisfactory  manner, 
when  those  men  made  it  possible  to  develop  from  that  this  highly  , 
scientific,  technical,  sensitive  business,  which  is  handling  the  produc-  t 
tion  of  the  farmers  to-day;  I say  that  they  are  five  of  the  greatest  \ 
citizens  that  this  country  produced,  and  I am  a great  admirer  of 
them  all,  and  I am  a great  believer  in  the  business.  They  had  no 
great  pattern  to  go  by  as  we  had  in  many  of  our  other  industries.  ; 
We  had  no  great  men  to  draw  on  or  no  great  pattern  in  Europe  to 
draw  from,  as  we  had  perhaps  in  the  steel  or  textile  or  some  of  the  \ 
other  industries.  They  took  the  raw  material,  these  five  American  ! 
men,  and  budded  something  that  is  unequaled  in  any  place  in  the  ■ 
world.  There  is  no  such  agency,  no  such  fine,  detailed  manufactur-  { 
ing  institution  in  the  world  as  these  packing  plants.  I say  to  you  i 
men  that  I have  had  a great  deal  of  comfort  and  satisfaction  out  of 
my  experience  in  the  packing  business,  but  the  greatest  comfort  I 
am  going  to  get,  and  the  greatest  satisfaction  and  the  crowning  satis- 
faction of  my  career  will  be  when  this  industry  is  put  where  it  belongs, 
where  I think  it  belongs,  and  when  those  men  are  placed  in  the  minds 
of  the  American  people  where  they  are  entitled  to  be  placed.  They 
have  had  abuses  that  they  are  not  entitled  to  carry,  and  this  industry 
has  had  abuses  and  I say  to  you  men,  as  has  been  said  here,  that 
there  is  no  buisness  in  the  world,  in  my  opinion,  that  has  the  keen 
competition  that  the  packing  business  has,  and  there  is  no  business 
in  the  world,  in  my  opinion,  that  is  run  cleaner,  squarer,  than  the 
packing  business  to-day. 

Now,  you  can  easily  go  back  20  or  25  years  and  find  faults,  and  I 
am  not  defending  those  things.  We  have  a different  vision  to-day 
than  the  people  of  25  years  ago  had,  and  maybe  the  things  that  we 
are  condemning  some  of  these  large  industries  for  doing  at  that  time 
were  things  that  through  that  constructive  period  were  not  con- 
demned by  the  citizens,  and  it  is  hardly  fair  now  for  us  to  take  that 
background,  as  was  mentioned  here  yesterday,  and  continue  with  that  i 


MEAT  PACKER. 


417 


background,  to  constantly  condemn  this  great  industry,  and  I say 
this  to  you  men,  I feel  there  is  nothing,  in  my  opinion,  to  justify 
these  measures  or  any  measure,  unless  it  is  that  one  thing  that  I 
hope  it  will  accomplish.  I do  not  think  the  facts  of  the  remote  past 
should  be  now  taken  as  a justification  for  extending  any  measure  of 
control  or  even  of  supervision  of  the  packing  industry,  but  I do  feel 
that  that  is  necessary  now  to  clear  the  atmosphere.  I do  feel  that 
the  people  have  the  idea  set  in  their  minds  that  there  is  something 
wrong  in  this  industry,  based  a good  deal  upon  conditions  that  have 
grown  out  of  the  situation  right  here  in  Washington.  I do  feel  that 
this  is  so  set  in  the  minds  of  the  people  that  whether  it  is  based  on 
facts  or  not,  it  is  important  from  my  standpoint  to  have  it  cleared  up, 
and  if  you  can  legislate  in  a proper  way  and  in  a way  that  will  be 
helpful  I think  the  situation  may  justify  some  legislation 

I have  been  in  the  business  30  years  or  thereabouts.  I walked 
into  the  stockyards  when  I first  went  to  work  there.  I did  not  know 
a soul  in  the  whole  industry,  not  one  single  man,  and  when  I went 
there,  there  was  one  scientific  man  in  the  Union  Stock  Yards,  one 
chemist;  in  fact,  he  came  shortly  after  I went  to  work  there.  In  the 
industry  to-day  in  Chicago  alone,  working  to  develop  scientifically 
the  manipulation  of  these  by-products,  raising  constantly  the  level  of 
value  of  the  different  products,  bringing  them  from  the  lower  to  the 
higher  value  levels  and  improving  the  products  that  we  are  turning 
out,  there  are  at  least  350  scientific  men,  chemical  engineers,  electrical 
engineers,  and  all  sorts  of  scientific  men  working  constantly  on  those 
problems.  Through  that  work  has  been  developed  this  very  technical, 
sensitive  business,  and  I say  to  you  men,  too,  that  this  business,  as 
Mr.  Oscar  Mayer  said  yesterday,  this  great  industry  and  the  industry 
of  live-stock  production  is  not  in  a position  to  much  longer  stand  the 
stress  of  the  situation  that  we  have  gone  through  in  the  last  eighteen 
months.  I have  been  in  the  business  for  30  years  and  never  have  I 
seen  such  a condition  existing.  And  I say  seriously  that  unless 
there  is  a change  there  is  going  to  be  a calamity  in  this  country,  and 
a big  one. 

I have  advised  with  some  of  the  farm  bureau  gentlemen  in  Chicago 
and  I have  discussed  these  matters  from  time  to  time.  I have  seen 
here  in  print  what  is  called  the  Williams  bill.  I think  that  pretty 
nearly  outlines  the  idea  of  the  farm  bureau  people,  as  I understand 
their  ideas,  and  I believe  their  ideas  were  based  on  a broad-minded 
consideration  of  the  entire  problem.  I think  in  discussing  it  with 
them  they  showed  a disposition  to  me,  at  least,  of  wanting  to  work  out 
something  that  would  clarify  this  situation  and  be  helpful  to  all 
elements  of  this  industry. 

That  bill,  as  I read  it,  is  pretty  much  the  Haugen  bill  with  a few 
amendments,  the  one  important  amendment  being  the  elimination 
of  the  Interstate  Commerce  Commission  and  throwing  it  all  into  the 
Department  of  Agriculture. 

There  is  probably  only  one  additional  suggestion  that  I could  make 
as  to  that  bill  or  to  the  Haugen  bill  which,  I think,  is  in  line  with  the 
tendency  of  the  minds  of  the  men  here  as  I gathered  it  yesterday, 
and  that  would  be  to  entirely  eliminate  the  Federal  Trade  Commission 
from  jurisdiction  in  this  matter.  That  was  done  in  the  Senate,  and 

46985—21 27 


418 


MEAT  PACKER. 


as  I understand  it,  Mr.  Haugen  has  introduced  an  amendment  to  that 
effect  to  his  bill. 

That  amendment  with  a few  other  changes,  and  making  the 
Haugen  bill  conform  to  the  idea  of  putting  it  all  under  the  Department 
of  Agriculture,  in  my  opinion,  would  probably  make  a bill  that  we 
could  all  stand  for. 

I can  not,  as  I said,  speak  for  all  the  packers  in  that  respect,  but  I 
will  say  this,  that  contrary  to  the  opinion  as  expressed  here,  all  the 
packers  have  not  been  opposed  to  all  kinds  of  legislation.  They  have 
opposed  legislation,  and  you  men  have  no  doubt  received  the  impres- 
sion that  they  would  oppose  all  kinds,  but  the  legislation  they  have 
opposed  up  to  the  Haugen  bill  and  the  Williams  bill,  contained  features 
that  made  it  absolutely  necessary  for  them  to  oppose  them,  and  rather 
than  stand  for  such  bills  now,  we  and  all  the  packers  might  as  well 
die  fighting  as  die  by  strangulation. 

Mr.  Voigt.  Mr.  Wilson,  do  you  want  to  go  on  record  as  favoring 
the  Williams  bill  ? 

Mr.  Wilson.  I say  that  bill  or  the  Haugen  bill,  with  these  few  modi- 
fications, in  my  opinion,  would  pretty  nearly  cover  the  present  situa- 
tion. I think  the  danger  here,  and  the  danger  you  men  should  try 
to  avoid,  is  in  making  these  bills  too  far-reaching.  I think  it  better 
to  formulate  a conservative  bill  rather  than  one  otherwise,  and  I say  ; 
again  and  want  to  impress  upon  you  this  fact,  that  any  bill,  I do  not  . 
care  whether  it  is  drastic  or  otherwise,  will  never  accomplish  the  results 
unless  the  agency  having  the  supervisory  power  has  the  ability  and  T 
the  right  to  firing  these  different  branches  of  this  industry  together, 
so  that  they  finally  can  work  out  these  problems. 

Mr.  Voigt.  You  say  that  the  Haugen  bill  will  pretty  nearly  cover  ; 
the  situation;  that  is  your  exact  language. 

Mr.  Wilson.  The  Haugen  bill  with  these  few  changes  I have  • 
suggested.  For  instance,  I think  it  would  be  a great  mistake  to  f 
have  any  dual  authority.  I think  it  would  not  only  be  expensive,  ] 
but  I think,  as  the  Secretary  expressed  it  yesterday,  it  would  com- 
plicate  the  situation,  because  there  would  be  divided  authority  and  , 
you  would  never  be  able  to  put  your  finger  on  just  where  the  trouble  ; 
was.  These  transactions  are  so  intermixed  and  interwoven  as 
between  the  stockyards  company  and  the  commission  man  and 
the  trader  and  the  packer’s  buyer  and  the  packer  that  it  would  be  a 
difficult  proposition  to  definitely  determine  the  responsibility  with 
joint  agencies  trying  to  handle  it. 

Mr.  Voigt.  Now,  you  say  the  Haugen  bill  will  pretty  nearly 
cover  the  situation  provided  the  supervision  be  exercised  or  the 
authority  be  exercised  under  the  Secretary  of  Agriculture.  What 
other  points  do  you  criticize  in  the  Haugen  bill  ? 

Mr.  Wilson.  Then  there  is  the  elimination  of  the  Federal  Trade 
Commission  entirely  from  supervision  of  the  industry  so  there  will 
be  no  conflict  there.  That,  of  course,  is  the  case  with  the  banks 
under  the  banking  act  and  with  the  railroads  under  the  Interstate 
Commerce  Commission.  The  Federal  Trade  Commission  has  no 
jurisdiction  over  them. 

The  Chairman.  The  thought  is  to  give  the  Secretary  of  Agri- 
culture exclusive  jurisdiction. 

Mr.  Wilson.  Yes,  sir. 


MEAT  PACKER. 


419 


Mr.  Voigt.  You  mean  that  any  authority  the  Federal  Trade 
Commission  now  has  over  your  industry — - — 

Mr.  Wilson  (interposing).  Should  be  transferred  to  the  Secre- 
tary of  Agriculture,  and  that  is  in  this  bill.  Why  have  two  agencies 
exercising  the  same  powers. 

Mr.  Voigt.  If  any  bill  is  passed,  you  would  like  to  see  the  ex- 
clusive authority  over  your  industry  vested  in  the  Secretary  of 
Agriculture  ? 

Mr.  Wilson.  That  is  my  feeling;  yes,  sir. 

Mr.  Voigt.  Is  there  anything  else  in  the  Haugen  bill  you  want 
to  comment  on  specifically  ? 

Mr.  Wilson.  There  is  one  paragraph  here,  No.  402,  on  page  26. 
I think  that  entire  paragraph  would  be  very  objectionable.  It  is 
very  unusual. 

Mr.  Thompson.  Section  402  ? 

Mr.  Wilson.  Yes. 

Mr.  Voigt.  402  provides  that  if  an  officer  or  one  of  the  employees, 
agents,  or  directors  of  your  corporation  violates  the  lav/  that  it  shall 
also  be  considered  a violation  by  the  corporation. 

Mr.  Wilson.  Yes;  but  it  goes  much  further  than  that,  Mr.  Voigt. 

Mr.  Gernerd.  Pardon  me,  what  section  are  you  considering. 

Mr.  Wilson.  Section  402,  H.  R.  14.  You  will  find  that  in  section 
401  the  corporation  is  held  responsible  for  all  the  acts  of  the  employees, 
but  this  other  section  undertakes  to  add  this  language: 

If  any  officer,  employee,  agent,  director,  or  member  of  the  governing  board,  of  any 
packer,  stockyards  owner,  market  agency,  or  deafer,  negligently  omits  personally 
to  perform  any  necessary  act  or  properly  to  supervise  or  apportion  duties  among  his 
subordinates  in  the  execution  of  the  authority  and  functions  vested  in  him,  and  by 
reason  of  such  omission  a violation  of  this  act  directly  results,  he  shall  be  liable  to  all 
the  penal  or  other  provisions  of  this  act  in  respect  to  such  violation. 

We  have  in  our  organization  alone  twenty -five  or  thirty  thousand 
employees  scattered  all  over  the  country,  and  through  failure  in  judg- 
ment or  through  a lack  of  judgment  or  something  else  I might  fail  to 
properly  supervise  the  division  of  the  work  among  my  employees,  and 
I would  not  want  to  go  to  jail  for  that,  and  I would  not  want  anybody 
to  say  that  I was  subject  to  the  possibility  of  going  to  jail.  I do  not 
think  that  is  fair. 

The  Chairman.  Mr.  Wilson,  do  you  not  think  the  word  “ negli- 
gently” would  protect  you  to  some  extent? 

Mr.  Wilson.  No;  who  is  going  to  say  whether  that  was  negligent 
or  was  premediated  ? 

The  Chairman.  If  we  substitute  the  word,  as  some  one  has  sug- 
gested, “ willfully,”  would  not  that  meet  the  objection. 

Mr.  Wilson.  There  is  everything  in  the  other  paragraph,  para- 
graph 401,  that  is  necessary. 

The  Chairman.  I might  say  that  this  is  a provision  that  has  been 
inserted  in  a number  of  bills,  but  probably  not  exactly  in  this  same 
language.  I believe  there  was  a provision  like  this  in  the  grain  fu- 
tures bill. 

Mr.  Tincher.  There  is  a section  in  the  grain  futures  bill  that  is 
comparable  with  this. 

The  Chairman.  I might  say  that  the  wording  of  this  section  has 
troubled  us  a good  deal.  We  want  to  get  something  a little  stronger 
than  what  we  had  before  and  still  there  is  the  danger  that  has  been 


420 


MEAT  PACKER. 


pointed  out.  There  might  be  some  way  of  compromising  or  fixing 
up  something  that  would  be  fair. 

Mr.  Wilson.  Section  401  is  stronger  than  the  usual  provision. 
Section  401  says: 

When  construing  and  enforcing  the  provisions  of  this  act,  the  act,  omission,  or 
failure  of  any  agent,  officer,  or  other  person  acting  for  or  employed  by  any  packer, 
stock  yard  owner,  market  agency,  or  dealer,  within  the  scope  of  his  employment  or 
office  shall,  in  every  case,  also  be  deemed  the  act,  omission,  or  failure  of  such  packer, 
stock  yard  owner,  market  agency,  or  dealer,  as  well  as  that  of  such  agent,  officer  or 
other  person. 

That  is  pretty  broad. 

Mr.  Voigt.  That  is  quite  a customary  provision. 

Mr.  Wilson.  It  is  broader  than  the  customary  provision.  I have 
never  seen  one  as  broad  as  that;  at  least,  I have  never  seen  one  that 
mentioned  the  packers  in  it  before. 

Mr.  Voigt.  Now,  you  have  criticized  section  402,  will  you  pro- 
ceed, please,  and  point  out  other  defects. 

Mr.  Wilson.  Section  316  should  be  stricken  out.  The  Interstate 
Commerce  Commission  regulations  of  that  section  are  similar  to  the 
Federal  Trade  Commission  powers  which  I have  suggested  be  trans- 
ferred to  the  Department  of  Agriculture.  : 

Mr.  Voigt.  You  have  discussed  that.  i 

Mr.  Wilson.  No;  that  is  a different  paragraph  from  the  one  elimi-  i 
nating  the  Interstate  Commerce  Commission.  This  section  316  pro- 
vides the  power  for  the  Interstate  Commerce  Commission  to  examine  ' 

books  and  require  reports,  etc.,  of  stockyards,  commission  men,  « 

traders,  etc.  The  Federal  Trade  Commission  powers  to  examine 
books  and  so  forth,  of  the  packers  is  found  in  section  208  of  the 
Haugen  bill  giving  the  Department  of  Agriculture  the  powers  of  the 
Federal  Trade  Commission  to  examine  packers’  books  and  so  forth.  i 

Now,  if  you  change  the  Haugen  bill  so  as  to  eliminate  the  Interstate  j 

Commerce  Commission’s  jurisdiction  over  stockyards  and  place  j 

packers  and  stockyards  both  under  the  Secretary  of  Agriculture,  it  \ 

is  unnecessary  to  give  him  similar  powers  of  both  the  Federal  Trade  ; 

Commission  and  the  Interstate  Commerce  Commission,  so  I rec-  ! 

ommend  striking  out  section  316  and  amending  section  207  so  as  to 
cover  stockyards,  market  agencies,  and  dealers,  and  the  bill  will  be 
correct. 

Then  there  are  other  changes  that  would  be  necessary  to  insert, 

“ Secretary”  in  place  of  “the  Commission.” 

You  will  find  on  page  3,  Title  II,  a paragraph  in  the  definition  of  a 
packer,  which  reads  as  follows: 

The  term  “packer”  means  any  person  engaged  in  the  business  (a)  of  buying  live 
stock  in  commerce  for  purposes  of  slaughter,  or  (6)  of  manufacturing  or  preparing 
live-stock  products  for  sale  or  shipment  in  commerce. 

Now,  when  you  refer  back  to  the  definition  of  live-stock  products 
it  says,  “The  term  dive-stock  products’  means  all  products  and  by- 
products of  the  slaughtering  and  meat-packing  industry  derived  in 
whole  or  in  part  from  live  stock.”  I think  those  two  combined 
extend  this  act  far  beyond  what  you  conetmplate.  It  goes  into 
practically  every  industry  in  the  country  and  puts  it  under  that 
control. 

Mr.  Voigt.  Do  you  think  that  it  would  extend  to  the  manufac- 
ture of  shoes  ? 


MEAT  PACKER. 


421 


Mr.  Wilson,  Absolutely.  The  hides  are  used  there. 

Mr.  Thompson.  Would  it  include  the  poultry  industry? 

Mr.  Wilson.  Well,  the  poultry  industry  is  included  in  the  defini- 
tion. It  would  include  the  automobile  industry  because  they  use 
leather  and  hair,  and  they  are  by-products  of  the  animal.  It  would 
go  far  beyond  what  you  have  in  your  minds,  I am  sure. 

The  Chairman.  Do  you  think  there  would  be  any  possibility  of 
extending  it  to  shoes? 

Mr.  Wilson.  Yes;  they  are  using  hides,  and  under  the  literal  con- 
struction here  the  hide  is  a by-product  of  the  animal. 

The  Chaikman.  That  is  true,  and  the  same  thing  true  in  connec- 
tion with  the  shoe  is  true  of  the  forest.  They  use  wooden  parts  for 
that  shoe.  Can  you  suggest  language  that  would  cover  that? 

If  you  recall  the  cross-examination  by  the  gentleman  from  Texas, 
Mr.  Young,  in  the  last  Congress,  his  contention  was  that  the  packers 
were  interested  in  the  oil  mill  industry,  and  for  that  reason  he  claimed 
it  should  be  covered  in  the  bill.  We  have  the  report  of  the  Federal 
Trade  Commission  on  the  leather  industry,  which  was  to  the  effect 
that  this  should  extend  to  the  tanners  or  the  leather  industry.  I 
am  simply  referring  to  that  contention  and  the  facts  brought  out  at 
the  hearings,  and  the  contention  made  by  members  of  the  Committee. 
I am  quite  sure  there  should  be  some  limitation  there,  but  the  ques- 
tion is  just  what  the  limitation  should  be.  Can  you  suggest  language 
along  that  line  ? Would  you  change  the  language  to  include  tanners  ? 

Mr.  Wilson.  I really  do  not  see  the  need  for  including  them. 

The  Chairman.  You  are  familiar  with  the  report  of  the  Federal 
Trade  Commission? 

Mr.  Wilson.  Yes.  Of  course,  this  would  include  the  hide  up  to 
the  time  it  would  go  to  the  tannery,  and  it  would  be  within  the  power 
of  the  Secretary  to  ascertain  that  those  hides  went  to  the  tanner  at 
a fair  market  price,  so  there  could  not  be  any  advantage  taken  back 
of  that. 

The  Chairman.  You  think  that  would  cover  it  all  ? 

Mr.  Wilson.  I am  sure  it  would.  If  you  want  to  control  the 
tanning  industry,  make  a separate  bill,  and  put  it  into  some  depart- 
ment. 

The  Chairman.  We  were  taking  notice  of  the  practices  pointed 
out  by  the  Federal  Trade  Commission  and  the  packers’  correspond- 
ence. 

Mr.  Wilson.  As  I gather  the  terms  of  this  bill,  under  this  bill  it 
would  be  entirely  possible  for  the  Secretary  of  Agriculture  to  see 
that  none  of  those  abuses  such  as  they  intimated  were  possible. 

The  Chairman.  It  would,  up  to  the  selling  of  the  hide. 

Mr.  Wilson.  Here  is  an  entirely  separate  proposition.  There 
are  very  many  features  of  the  tanning  business  that  have  nothing 
to  do  with  the  packing  business.  If  you  want  to  regulate  them,' 
prepare  a bill  and  keep  them  separate  from  this;  do  not  involve 
them  in  this  proposition. 

The  Chairman.  The  question  is,  if  the  packers  monopolize  the 
tanning  industry — that  is  the  contention. 

Mr.  Wilson.  If  they  did,  and  after  the  Secretary  has  found  there 
is  that  tendency,  and  it  is  a dangerous  one,  that  would  be  the  time 
to  legislate. 

The  Chairman.  You  believe  in  excluding  them  at  the  present 
time  ? 


422 


MEAT  PACKER. 


Mr.  Wilson.  Yes. 

Mr.  Tincher.  If  the  bill  is  extended  to  tanneries,  the  question  is 
whether  it  could  not  with  the  same  force  be  said  to  cover  the  textile 
industry. 

Mr.  Wilson.  Absolutely;  under  a literal  construction  of  this 
language  it  would  go  all  the  way  through.  You  can  not  imagine 
the  extent  it  would  go  to.  It  would  go  to  the  extent  of  covering 
soap  manufacturers,  the  glue  manufacturers,  and  gelatine  manufac- 
turers, and  it  would  also  include  the  handlers  of  bones  used  in  the 
manufacture  of  toothbrushes  and  combs.  There  would  be  no  end  to 
the  extent  of  the  ramifications,  because  it  would  extend  to  every 
use  of  these  products. 

The  Chairman.  That  would  depend  upon  the  interpretation  of 
the  law,  but  it  is  well  enough  to  guard  against  that. 

Mr.  Wilson.  It  has  been  my  experience,  Mr.  Chairman,  that  any 
commission  or  any  department  of  the  Government  that  can  literally 
construe  a law  to  mean  further  expansion,  will  usually  interpret  it 
in  that  way. 

Mr.  WArd.  What  would  you  suggest  as  a definition  for  the  term 
“live-stock  products7’  ? 

Mr.  Wilson.  I would  suggest  a term  that  would  cover  the  situa- 
tion. Take  the  first  page,  at  line  11,  where  the  definition  of  the 
term  “live-stock  products”  begins.  I would  change  that  definition 
in  this  way,  making  it  read:  “The  term  ‘meat  food  products’  means 
all  edible  products  and  by-products  of  the  slaughtering  and  meat- 
packing industry.” 

Mr.  Ward.  Where  would  you  put  that  ? 

Mr.  Wilson.  Beginning  at  line  11  on  the  first  page,  cutting  out  the 
word  “live  stock,”  so  that  it  would  read:  “The  term  ‘meat  food 
products  ’ means  all  edible  products  and  by-products  of  the  slaughter- 
ing and  meat-packing  industry.” 

Mr.  Ward.  That  means  all  edible  by-products  ? 

Mr.  Wilson.  Yes. 

Mr.  Thompson.  You  cut  out  the  word  “slaughtering”  ? 

Mr.  Wilson.  I would  cut  out  the  words  “derived  in  whole  or  in 
part  from  live  stock.”  I do  not  see  that  that  is  necessary.  Then 
on  page  3,  line  5,  cut  out  the  word  “live  stock”  and  insert  the  words, 
in  keeping  with  the  change  on  the  first  page,  “meats,  or  meat  food 
products.”  Then  on  line  7 of  the  same  page  make  the  same  change, 
cutting  out  the  word  “live  stock”  and  inserting  the  words  “meat  or 
meat  food  products.” 

Mr.  Ward.  Would  you  not  put  in  the  word  “edible”  ? 

Mr.  Wilson.  The  definition  of  “meat  food  products”  on  the  first 
page  defines  it  as  “edible”  products. 

Mr.  Williams.  Would  those  changes  be  necessary  if  you  cut  out 
the  paragraph  you  have  referred  to  ? 

Mr.  Wilson.  Yes;  that  does  not  change  that  at  all.  Of  course 
there  is  no  chance  for  any  packer  to  escape  the  operation  of  the  law. 
The  definition  of  the  term  “packer”  means  “any  person  engaged  in 
the  business  of  buying  live  stock  in  commerce  for  purposes  of  slaugh- 
ter.” 

It  does  not  make  any  difference  what  the  by-products  departments 
are,  if  he  is  a packer  he  is  engaged  in  the  buying  and  slaughtering  of 
live  stock,  so  he  can  not  escape  because  of  this  change,  and  any 


MEAT  PACKER. 


423 


packer  who  is  operating  any  by-product  departments,  it  does  not 
make  any  difference  what  they  are,  is  included  under  that  definition, 
and  any  packer  buying  live  stock  in  commerce  for  the  purposes  of 
slaughter  is  included,  so  it  covers  them  all.  The  other  clause,  of 
course,  would  include  everybody  handling  food  products  who  might 
not  be  a slaughterer. 

There  is  another  suggestion  I would  like  to  submit  in  connection 
with  the  language  in  line  3,  page  8.  It  reads:  “The  court  may  affirm, 
modify,  or  set  aside  the  order  of  the  Secretary,  but  the  findings  of 
the  Secretary  as  to  the  facts,  if  supported  by  evidence,  shall  be  con- 
clusive. ” I would  like  to  insert  in  there  the  words  “if  supported 
by  the  prep  nderance  of  the  evidence.”  There  might  be  evidence 
that  is  entirely  insufficient,  but  it  would  foreclose  us. 

There  are  a few  other  changes,  more  or  less  technical,  that  some 
of  the  lawyers  can  handle  a great  deal  better  than  I can. 

Mr.  Hays.  Of  course  there  is  a little  danger  there  with  regard  to 
the  interpretation  of  the  term  “the  preponderance  of  the  evidence.” 

Mr.  Wilson.  Well,  you  might  say  the  weight  of  the  evidence. 

Mr.  Lightfoot.  That  change  was  made  in  the  bill  in  the  Senate. 
The  purpose  was  this,  that  if  the  Secretary  should  find  that  you  have 
violated  any  provisions  of  this  act,  and  he  orders  you  to  cease  and 
desist  from  such  violation,  you  can  appeal  from  that  order  to  the 
Circuit  Court  of  Appeals,  and  he  must  prepare  a statement  of  his 
finding  of  fact.  As  the  bill  now  reads,  if  his  conclusions  as  to  what 
the  facts  are,  are  supported  by  evidence,  any  evidence — although 
the  great  weight  of  the  evidence  might  be  contrary  to  his  judg- 
ment— the  Circuit  Court  of  Appeals  would  be  compelled  to  accept 
them.  It  can  not  go  behind  his  findings  of  what  the  facts  are,  even 
though  he  might  err  in  judgment.  The  rule  of  evidence  that  has  been 
in  force  in  this  country  since  the  foundation  of  the  Republic  has  been 
that  in  any  cause  of  action  the  weight  of  the  evidence  or  the  pre- 
ponderance of  the  evidence  must  support  the  judgment. 

Mr.  Tincher.  On  that  subject,  do  the  ordinary  appellate  courts 
have  the  power,  where  there  is  evidence,  to  review  the  facts,  or  is  not 
the  ordinary  proceeding  an  appeal  to  the  appellate  court,  not  to  in- 
quire into  the  facts,  unless  there  is  an  absolute  failure  of  proof  on  the 
proposition,  thus  leaving  that  lower  court,  or  the  jury,  as  the  case  may 
be,  as  the  principal  determiner  of  the  fact. 

Mr.  Lightfoot.  It  is  presumed,  of  course,  that  when  a jury  passes 
upon  the  facts  in  any  case  that  it  has  given  its  verdict  according 
to  the  weight  of  the  evidence. 

Mr.  Tincher.  Or  the  court. 

Mr.  Lightfoot.  Ordinarily,  the  courts  would  be  bound  to  follow 
the  conclusion  of  the  jury  on  that  point.  But  you  will  find  that  courts 
vary  in  their  pracrice,  arid  my  experience  has  been  that  some  of  them, 
even  when  they  have  very  little  authority,  will  set  aside  a judgment 
because  the  facts  do  not  support  the  judgment,  and  in  other  cases 
they  will  say,  “We  can  not  look  into  the  facts  because  the  jury  passed 
on  them.”  It  depends  on  the  temper  of  the  court  as  to  what  its  posi- 
tion is.  I do  not  see  any  reason  why  we  should  be  put  in  this  kind  of  a 
situation,  where  even  though  the  great  weight  of  the  evidence  is  con- 
trary to  the  judgment,  that  the  court  shall  be  bound  by  it.  I think 
we  ought  to  leave  that  matter  open  so  that  the  court  could  look  into 
the  evidence  and  see  whether  or  not  the  weight  of  it  has  supported 
the  conclusions. 


424 


MEAT  PACKER. 


Mr.  Tincher.  I consented  to  this  wording  in  the  Grain  Futures 
Act  on  this  theory,  that  an  administrative  officer  in  an  informal  way 
is  making  his  own  rules  of  evidence  and  taking  ex  parte  testimony,  as 
he  will  have  a perfect  right  to  do  in  these  proceedings,  and  perhaps 
should  not  be  clothed  with  the  authority  of  being  the  final  arbiter  of 
facts  in  the  matter. 

The  other  side  of  the  proposition  is  this,  that  there  might  be  a dozen 
witnesses  testify  to  one  fact  and  one  witness  disputing  the  proposition. 
The  trial  court  might  be  absolutely  warned  from  the  demeanor  and 
appearance  of  witnesses,  in  taking  as  a fact  what  the  one  witness  said, 
and  it  would  hardly  be  proper,  ordinarily,  to  permit  an  appellate  court 
to  disturb  that  finding.  It  is  a big  question,  I think. 

Mr.  Lightfoot.  It  is,  and  let  me  say  this  in  regard  to  that,  that 
I think  you  will  concede  this  is  founded  in  justice.  We  do  not  care 
how  much  or  how  little  evidence  the  Secretary  of  Agriculture  may 
have  or  deem  necessary  to  reach  his  own  conclusions.  He  may  take 
the  evidence  of  one  man,  as  you  say,  in  preference  to  the  other  evi- 
dence. This  is  no  limitation  on  the  amount  of  proof  or  the  extent 
or  weight  of  it,  by  which  he  reaches  his  conclusions;  but  we  do  say 
it  is  unfair  to  us  to  give  us  an  appeal,  where  we  can  take  the  matter 
before  the  Circuit  Court  of  Appeals,  foreclose  the  court  from  passing 
on  that  question. 

Mr.  Tincher.  Perhaps  I am  prejudiced  because  I have  always 
practiced  law  where  the  rule  was  that  where  an  appeal  was  taken, 
the  court  can  not  pass  upon  the  evidence,  except  to  find  out  whether 
there  is  any  evidence  to  sustain  the  lower  court. 

Mr.  Creigh.  Of  course,  it  is  not  contemplated  in  this  act  that  the 
Secretary,  personally,  is  going  to  take  this  evidence.  The  Secretary 
is  so  swamped  with  other  duties  that  he  can  not  do  that. 

Mr.  Tincher.  Here  is  the  trouble.  When  you  get  to  the  Circuit 
of  Appeals,  they  have  rules  of  evidence,  of  course.  The  Secretary 
is  not  confined  to  any  particular  rules  of  evidence  in  getting  his  in- 
formation. He  may  have  ex  parte  hearings,  he  may  take  affidavits, 
or  he  may  get  his  evidence  by  a route  that  may  appear  ridiculous  to 
the  circuit  court. 

Mr.  Creigh.  After  all,  if  it  would  appear  ridiculous  to  a circuit 
court,  then  is  not  the  defendant  entitled  to  have  it  reviewed  ? 

Mr.  Tincher.  The  theory  of  the  law  is  not  to  set  up  a court. 

Mr.  Creigh.  May  I make  one  suggestion,  not  to  tend  toward  a 
general  discussion  of  the  question.  Here  is  an  ex  parte  hearing,  with 
very  definite  findings,  and  there  is  a dispute  about  it,  and  it  is  chal- 
lenged. Where  is  your  evidence  ? 

Mr.  Tincher.  I took  that  into  consideration  in  leaving  that  in 
the  futures  act.  I am  not  contending  that  the  words  should  not  go 
in  here. 

Mr.  Hays.  Your  suggestion  is  that  this  be  amended  by  inserting 
the  expression  on  “preponderance  of  the  evidence”? 

Mr.  Lightfoot.  Either  “preponderance  of  the  evidence”  or 
“weight  of  the  evidence.” 

Mr.  Voigt.  I think  what  you  want  to  have  in  there  is  something 
to  make  it  correspond  to  the  law  in  the  jurisdictions  I am  familiar 
with,  and  it  seems  to  me  you  should  use  the  word  “credible.”  The 
general  rule  is  that  the  upper  courts  will  not  disturb  a finding  of  fact 
in  the  lower  court  if  that  finding  is  supported  by  credible  evidence. 


MEAT  PACKER. 


425 


Mr.  Lightfoot.  Here  is  the  point 

Mr.  Voigt  (interposing).  The  upper  court  will  not  reweigh  ail  the 
evidence,  nor  will  it  count  the  noses  of  the  witnesses.  It  will  see 
whether  there  is  credible  evidence  to  support  the  finding. 

The  Chairman.  Mr.  Wilson,  are  you  through? 

Mr.  Wilson.  I have  nothing  further  to  say,  Mr.  Chairman,  except 
possibly  this : I read  over  the  Secretary’s  statement  yesterday  and 
I was  rather  impressed  with  his  evidence,  which  fitted  in  with  the 
interview  I had  with  him.  I think  he  rather  indicated  that  the  great 
problem  of  this  industry  was  lack  of  a clear  understanding  of  the 
entire  situation,  and  I think  I gathered  from  his  talk  that  he  thought 
that  was  the  big  job  for  the  present,  to  understand  the  situation 
and  know  the  industry,  and  have  an  opportunity  to  make  proper 
investigations  of  the  conditions  surrounding  the  industry.  I think 
he  is  right,  but  I think  we  are  really  in  a position  where  we  probably 
should  go  a little  further,  in  view  of  the  attitude  of  the  public  at  this 
time,  and  I think  I have  indicated  to  you  that  if  something  along 
that  line  could  be  worked  out  it  would  meet  with  the  approval,  prob- 


ably, of  all  the  packers. 

I thank  you  very  much,  Mr.  Chairman. 

The  Chairman.  I had  in  mind  another  question  as  to  transporta- 
tion and  exchange  as  related  to  the  declining  prices.  To  what  extent 
does  that  affect  export?  We  are  at  a disadvantage  on  account  of 
exchange? 

Mr.  Wilson.  The  exchange  affects  it  very  materially  I think 
after  all  that  is  going  to  be  a very  controlling  proposition  in  the  indus- 
try. If  we  are  not  going  to  be  able  to  move  our  surplus  products  we 
are  producing  a surplus — and  then  build  up  on  that  basis,  our  only 
outlet  is  export.  If  we  can  not  find  some  way  to  make  it  possible 
for  the  surplus  production  in  this  country  to  go  to  Europe,  we  have 
got  to  back  up  on  production,  and  the  only  way  that  I see  by  which 
that  will  be  possible  will  be  to  find  some  way  for  the  American  people, 
through  the  Government  or  otherwise,  to  make  investments  in  foreign 
countries  that  will  establish  credits  over  there  and  will  enable  those 


people  to  make  purchases  in  this  country. 

The  Chairman.  The  high  rates  of  transportation  are  also  a factor. 

Mr.  Wilson.  That  is  a very  important  factor,  although  the  marine 
rate  is  not  so  important  as  the  inland  rate  at  the  present  time. 

The  Chairman.  Your  rates  are  much  higher  than  the  rates  from 
other  countries  ? 

Mr.  Wilson.  The  marine  rates;  but  our  inland  rate  is  very  much 
higher,  and  other  countries  are  in  a happy  position  because  most  of 
them  have  their  industries  located  on  the  seaboard  and  do  not  have 
to  compete  with  our  inland  rates  except  on  their  live  stock  coming  in. 

The  Chairman.  Are  you  at  a disadvantage  as  to  wages  paid? 

Mr.  Wilson.  Yes;  we  are  on  a very  high  level. 

The  Chairman.  Have  you  made  an  investigation  of  that? 

Mr.  Wilson.  We  are  on  a very  high  level  as  to  production  as 
compared  with  South  America. 

The  Chairman.  South  America  is  your  competitor  ? 

Mr.  Wilson.  South  America  is  our  competitor  on  beef.  We  have 
no  very  large  competitor  on  pork  products,  except  probably  Den- 
mark. South  America  is  gradually  doing  more  in  that  line,  par  cu- 
larly  Brazil  and  Argentina.  We  have  a little  competition  from  China, 
but  on  a very  inferior  grade  of  stuff,  so  it  is  not  serious  competition. 


426 


MEAT  PACKER, 


The  Chairman.  The  competition  of  Denmark  is  not  considered 
serious,  is  it  ? 

Mr.  Wilson.  Denmark  is  considerable  of  a factor,  and  then  the 
local  production  in  this  country  is  a factor.  The  Irish  production 
is  quite  a factor  in  the  English  market,  and  the  English  production 
itself  cuts  some  figure.  Of  course,  central  Europe  is  in  bad  shape 
just" at  present.  They  are  sorely  in  need  of  our  products;  if  we  can 
find  some  way  to  make  it  possible  for  them  to  establish  credits,  the\ 
would  use  considerable  quantities  of  our  pork  products. 

The  Chairman.  The  fact  remains  that  it  takes  time  to  cure  that 
situation. 

Mr.  Wilson.  It  takes  more  than  time;  it  takes  some  intelligent 
action. 

The  Chairman.  Time  and  intelligent  action.  Is  there  anything 
that  you  could  suggest,  by  way  of  legislation,  that  would  be  of  any 
assistance  ? 

Mr.  Wilson.  I do  not  know. 

The  Chairman.  That  might  properly  come  before  this  committee. 

Mr.  Wilson.  I know  the  trouble.  I know  the  American  people, 
in  my  opinion,  have  to  find  a way  to  make  investments,  permanent 
investments,  in  foreign  countries,  as  England  did  after  our  Civil 
War  in  this  country.  They  made  investments  here  and  helped  us  i| 
with  our  railways.  We  have  the  money  here  and  we  must  find  some  ! 
way  to  make  those  investments  over  there  and  make  it  possible  for 
those  people  to  reestablish  themselves,  and  in  that  way  improve  the  j! 
rates  of  exchange.  We  have,  of  course,  the  Foreign  Trade  Finance 
Corporation  in  the  process  of  organization,  and  if  some  support 
could  be  given  to  them  in  some  way  or  other,  if  the  Government 
could  get  back  of  them  in  some  way,  it  would  be  very  helpful.  That 
is  a step  in  the  right  direction.  The  trouble  is  in  finding  a way  to  : 
establish  credits  over  there,  to  improve  the  exchange  rates. 

The  Chairman.  Are  there  any  other  causes  you  care  to  comment  j 
on  ? 

Mr.  Wilson.  I think  we  have  pretty  fully  covered  them. 

The  Chairman.  I mean  in  regard  to  the  difficulty  we  are  up  against  \ 
in  the  matter  of  ex 


Mr.  Wilson.  I think  not.  I thank  you  very  much,  Mr.  Chairman. 

Mr.  Ward.  Mr  Chairman,  I desire  to  make  a request  for  hearings 
on  House  joint  resolution  78,  beginning  Thursday,  May  19,  1921, 
at  10  o’clock  a.  m. 

The  Chairman.  The  committee  will  take  your  request  under  con- 
sideration. 

(Thereupon,  a recess  was  taken  until  2 o’clock  p.  m.) 


AFTER  RECESS 


The  committee  reconvened  at  2.30  o’clock  p.  m.,  pursuant  to 
recess,  Hon.  Gilbert  N.  Haugen  (chairman)  presiding. 

The  Chairman.  The  committee  will  come  to  order. 

I have  conferred  with  the  parties  who  are  here  in  the  interest  of 
the  bill,  and  they  seem  to  be  quite  willing  that  we  should  yield  some 
time  to  the  opponents  of  the  bill,  inasmuch  as  they  were  kind  enough 
to  yield  time  to  the  Secretary.  How  much  time  do  you  think  you 


want  ? 


MEAT  PACKER. 


427 


Mr.  Creigh.  T should  judge,  Mr.  Chairman,  that  we  would  not 

want  any  more  than  half  an  hour.  , 

The  Chairman.  Is  it  agreeable,  then,  to  the  committee  to  hear 
them  not  to  exceed  three-quarters  of  an  hour  ? 

Without  objection  it  will  be  so  ordered.  Mr.  Lightfoot,  you  have  a 

Mr  Lightfoot.  Mr.  Chairman,  while  Mr.  Nash  was  on  the  stand 
some  of  the  members  of  the  committee  asked  him  to  point  out  some 
of  the  respects  in  which  he  thought  that  the  report  of  the  r ederal 
Trade  Commission  with  relation  to  the  packing  industry  contained 
misstatements  or  errors,  and  he  has  written  his  statement,  being 
unable  to  remain  in  the  city,  and  I have  been  requested  to  have  this 
put  in  the  record  in  answer  to  and  in  response  to  the  request  that 
was  made  by  members  of  the  committee.  And  if  it  is  permissible, 
I will  just  hand  it  to  the  stenographer  and  ask  that  it  be  incorporated 

in  the  record.  ......  , , 

The  Chairman.  Without  objection,  it  will  be  so  ordered. 

(The  statement  presented  by  Mr.  Lightfoot  on  behalf  of  Mr.  Mash 
is  as  follows:) 

May  5,  1921. 

Hon  Gilbert  N.  Haugen,  Chairman  House  Agriculture  Committee , 

Room  452  House  Office  Building , Washington,  D.  G. 

Dear  Sir-  Pursuant  to  the  committee’s  request  that  I supply  it  with  facts  indi- 
cating the  inaccuracy  or  the  unfairness  of  the  Federal  Trade  Commission  s report  con- 
cerning the  meat-packing  industry,  I herewith  call  the  committee  s attention  to  the 

^InTsummary  in  part  1 of  the  commission’s  report  on  page  24  at  the  end  of  the 
third  paragraph  the  statement  is  made  that  the  five  larger  packers  “hold  the  fortunes 
of  their  competitors  in  their  hands.”  On  the  same  page,  second  paragraph  up  from 
the  bottom,  it  is  asserted  that  “ the  competitors  of  these  five  larger  concerns  are  at  their 
mercy  because  of  the  control  of  the  market  places,  storage  facilities,  and  the  refrig- 
erator cars  for  distribution.”  T i.  v • 

I deny  that  either  of  the  above  statements  are  true.  I have  been  m the  packina 
business  as  a so-called  independent  packer  for  the  last  25  years  and  I most  emphat- 
ically denv  that  the  five  larger  packing  companies,  either  individually  or  collectively, 
hold  the  fortunes  of  mvself  or  my  company,  the  Cleveland  Provision  Co.,  in  their 
hands.  We  compete  with  all  of  these  larger  packers  every  day  m both  the  buying 
of  live  stock  and  the  selling  of  the  finished  products.  . , , , 

I also  most  emphatically  deny  that  "the  competitors  (of  which  I am  one)  of  these 
five  concerns  are  at  their  mercy.”  Neither  I nor  any  so-called  independent  packing 
•company  I know  of  are  at  the  mercy  of  the  five  concerns  named  They  certainly  do 
not  control  market  places  in  which  we  deal.  They  do  not  control  the  storage  facilities 
which  we  use,  and  they  most  emphatically  do  not  control  the  refrigerator  cars  we  use 
The  Cleveland  Provision  Co.  owns  nearly  200  cars  of  its  own  and  many  other  so-called 
independent  packing  companies  throughout  the  United  States  own  their  own  refriger- 
ator cars.  These  cars  are  controlled  by  nobody  but  the  companies  to  which  tney 

^ei°cali  your  attention  to  the  list  of  commodities  produced  or  distributed  by  the  five 
larger  packers  as  it  appears  on  pages  96,  97,  98,  99,  100,  101,  and  102  of  part  1 of  the 
' Federal  Trade  Commission’s  report.  , . ,,  ^ A 

To  my  mind  this  list  is  a most  glaring  example  of  the  methods  employed  by  the  1 ed- 
eral Trade  Commission  in  its  attempt  to  bolster  up  a weak  case  against  the  so-called 
Big  Five.  The  Commission  makes  it  appear  in  the  report  that  the  packers  are  dan- 
dling 639  different  commodities.  This  apparently  was  done  for  the  purpose  of  trying 
to  convey  the  impression  that  the  packers  were  handling  such  a large  number  of  com- 
modities that  they  were  a great  menace . There  are  j ust  a few  of  these  items  on  this  list 
that  I desire  to  call  your  attention  to.  For  example,  the  commission  lists  as  separate 
i items  and  separate  commodities,  beef  tougue,  beef  tongue  fresh,  beef  tongue  cured, 
ox  tongue,  pickled  tongue,  potted  tongue,  and  smoked  tongue.  As  a matter  of  tact 
all  of  these  are  one  commodity.  The  list  contains  37  different  kinds  of  sausages, 
including  duplications,  and  presents  them  in  such  a way  that  makes  it  appear  that  37 
I kinds  of  sausages  are  37  kinds  of  commodities.  There  is  even  listed  as  two  separate 
commodities  "dried  sausages”  and  "dry  sausages.” 


428 


MEAT  PACKER. 


As  presented  the  report  to  my  mind  clearly  shows  the  exaggerations  indulged 
in  by  the  commission  throughout  its  report,  the  list  is  a typical  example  of  the 
Federal  Trade  Commission’s  methods. 

Further,  Chairman  Colver  in  many  public  speeches  and  in  statements  before  com- 
mittees in  Congress  made  the  deliberate  and  flat  assertion  that  the  five  larger  packers 
operated  1,000  retail  stores  in  England.  Mr.  Colver  said  information  proving  his 
assertion  would  appear  in  a subsequent  part  of  the  report,  which  at  that  time  nad 
not  been  issued.  This  charge  was  published  in  newspapers  throughout  the  world 
and  was  presented  in  such  a way  as  to  make  it  appear  that  the  packers  were  grasping 
for  the  retail  business  in  England.  A year  or  two  after  the  charge  was  made  public 
by  the  chairman  of  the  commission,  part  4 of  the  commission  s report  was  given  to 
the  public.  This  report  bears  on  its  cover  the  date  1919.  As  a matter  of  fact  it  did 
not  come  from  the  presses  of  the  Government  Printing  Office  until  1920.  When 
part  4 was  finally  issued  it  was  seen  on  page  43  that  the  commission  had  added 
a-  footnote  reading  “ since  this  section  was  written  (containing  the  statement  regarding 
the  1,000  retail  shops)  the  larger  packers  have  publicly  denied  that  they  have  any 
retail  shops  in  England  or  presumably  in  the  United  Kingdom.  The  commission 
has  made  no  investigstion  of  the  matter,  relying  entirely  on  the  accuracy  and  trust 
worthiness  of  the  document  cited.”  It  seems  to  me  that  the  commission  went  out 
of  its  way  in  this  instance  to  give  publicity  to  a statement  which,  if  true,  was  of  grave 
importance.  The  commission  should  have  had  no  difficulty  in  proving  or  disproving 
the  charge  made  and  although  the  footnote  was  added,  the  harm  to  the  larger  packing 
companies  was  done  more  than  a year  before  the  footnote  appeared  and  to  this  day, 
so  far  as  I know,  neither  the  Federal  Trade  Commission  or  Mr.  Colver  have  made  a 
public  correction  in  the  newspapers  of  this  harmful  and  totally  false  accusation. 

I also  wish  to  call  your  attention  to  part  five  of  the  commission’s  report  dealing  with 
profits  of  the  packers  and  to  statements  made  in  the  report  on  profiteering  transmitted 
to  the  Senate  in  response  to  Senate  resolution  of  June  10, 1 918.  This  report  was  printed 
as  Senate  Document  No.  248,  Sixty- fifth  Congress,  second  session. 

Throughout  part  five  of  the  commission’s  report  the  commission  indulges  in  unfair 
inferences  similar  to  the  one  appearing  on  page  18,  where  it  says  “while  it  is  Known 
that  profits  in  certain  years  are  not  accurately  reported  by  the  packers,  ’ ’ etc.  This  is 
merely  a broad  statement  made  by  the  commission  and  nowhere  in  this  number  of  the 
report  or  any  other  number  is  any  proof  offered  that  the  packers  did  not  accurately 
report  profits.  Part  five  of  the  commission’s  report  reeks  with  instances  similar  to 
the  above  which  will  present  themselves  to  any  casual  reader. 

On  page  14  of  the  commission’s  report  on  profiteering  made  to  the  Senate  the  follow- 
ing ^appears:  “The  profit  taken  by  Morris  & Co.  for  the  fiscal  year  ending  November, 
1917,  is  equal  to  a rate  of  18.6  per  cent  on  the  net  worth  of  the  company  (capital  and 
surplus)  and  263.7  per  cent  on  the  three  millions  capital  stock  outstanding.  ” The 
charge  that  Morris  & Co.  made  263.7  per  cent  on  its  capital  stock  outstanding,  published 
in  this  manner,  is  distinctly  unfair  to  Morris  & Co.  and  was  intended  to  create  a false 
impression  of  facts.  The  truth  of  the  matter  was  that  Morris  & Co.  had  not  capitalized 
a large  part  of  its  investment.  The  company,  for  reasons  of  its  own,  was  greatly 
undercapitalized  and  this  gave  the  Federal  Trade  Commission  an  opportunity  for  it  to 
endeavor  to  convey  to  the  country  the  idea  that  Morris  & Co.  actually  was  making  a 
profit  of  263.7  per  cent.  Mr.  Colver  used  this  figure  in  many  statements  and  public 
speeches  in  various  places  throughout  the  United  States. 

In  the  report  to  the  Senate  the  Federal  Trade  Commission  uses  the  term  “an  expo- 
sition of  the  excess  profits  of  four  of  the  big  meat  packers.”  The  report  then  declares 
that  “in  the  three  war  years  from  1915  to  1917  their  total  profits  have  reached  the 
astounding  figure  of  $140,000,000,  of  which  $121,000,000  represents  excess  over  their 
prewar  profits.  These  great  increases  in  profits  are  not  due  solely  to  increased  volume 
of  business.”  The  report  then  says  during  the  period  mentioned  the  return  of  profits 
“increased  400  per  cent,”  or  two  and  one-half  times  as  much  as  the  sales. 

As  a matter  of  fact,  the  increases  in  profits  during  the  years  mentioned  did  not  con- 
stitute an  increase  in  the  rate  on  the  actual  investment.  The  volume  of  profits  did 
increase  very  materially,  but  this  was  solely  due  to  increased  volume  of  business. 
This  readily  can  be  understood  when  it  is  known  that  in  March,  1913,  the  United 
States  exported  only  770,302  pounds  of  fresh  beef,  whereas  in  March,  1918,  due  to  the 
demand  produced  by  the  war,  we  exported  62,064,261  pounds,  or  more  than  eighty 
times  as  much  as  we  exported  in  March,  1913.  Exports  of  other  meats  increased  pro- 
portionately. I do  not  have  the  1917  figures  before  me  at  the  moment,  but  you  will 
find  that  they  approach  the  1918  figures.  In  su  h instances  it  is  quite  natural  that 
when  the  volume  of  the  beef  business  alone  increases  eighty  times  in  the  period  from 
1913  to  1918  that  the  volume  of  prices  should  increase  also.  In  every  document  it  has 
issued  the  Federal  Trade  Commission  has,  by  innuendo,  suggested  that  the  packers’ 
accounts  were  not  fairly  representative  of  real  profits,  but  the  commission  has  never 
produced  an  iota  of  evidence  to  this  effect. 


MEAT  PACKER. 


429 


Despite  the  Federal  Trade  Commission’s  attempt  to  convey  the  impression  that 
the  packers’  profits  were  exhorbitant,  it  may  interest  you  to  know  that  the  United 
States  Food  Administration  in  its  report  for  the  year  1918  states  that  the  profits  of 
the  packers  on  controlled  products  were  5.6  per  cent  of  the  total  investment  for  the 
year,  as  shown  by  audited  accounts.  This  was  considerable  less  than  the  maximum 
profits  allowed  and  on  the  gross  sales  this  profit  represented  a percentage  of  only  1.6 
per  cent.  Figures  which  have  been  subject  to  audit  by  the  Federal  Trade  Commis- 
sion prove  that  the  average  profit  of  the  packer  per  dollar  per  sale  has  been  about  2 
cents. 

In  part  2 of  the  commission’s  report,  the  statement  is  made  that  the  packers  had 
an  agreed  price  for  lard  compound.  The  commission,  by  inference  at  least,  attempted 
to  show  that  this  was  an  evidence  of  combination  and  collusion  among  the  packers. 
As  a matter  of  fact  there  was  an  agreed  price  for  lard  compound,  but  the  agreement 
was  made  at  the  direction  of  the  United  States  Food  Administration  . Although  the 
Federal  Trade  Commission  spread  this  lard  compound  agreement  throughout  the 
length  and  breadth  of  the  country  as  an  evidence  of  combination  and  collusion  of  the 
packers  it  has  to  this  day  never  publicly  corrected  its  false  statements  and  inferences. 
Had  the  commission  desired  to  be  fair  it  should  have  given  publicity  to  the  fact  that 
the  agreement  mentioned  was  made  at  the  direction  of  another  agency  of  the  United 
States  Government  at  a time  when  that  agency  was  in  a position  to  control  not  only 
prices  but  profits  as  well. 

The  above  are  only  a few  examples  of  the  inaccuracies  and  exaggerations  in  the 
Federal  Trade  Commission’s  report.  The  whole  report  is  filled  with  examples  of  the 
same  kind  but  to  detail  each  one  of  them  would,  I fear,  be  a burden  upon  the  time  of 
your  committee. 

V ery  truly,  yours, 

S.  T.  Nash, 

Vice  President. 


Mr.  Lightfoot.  Mr.  Creigh  wishes  to  be  heard. 

The  Chairman.  Very  well,  we  will  hear  from  you,  Mr.  Creigh. 

STATEMENT  OF  THOMAS  CREIGH,  REPRESENTING  THE 
CUDAHY  PACKING  CO. 

Mr.  Creigh.  Mr.  Chairman  and  gentlemen  of  the  committee, 
more  or  less  in  and  out  of  the  program  here  I,  as  representing  the 
Cudahy  Packing  Co.,  have  had  quite  a little  bit  to  say.  So  I want  to 
cut  that  time  out  of  whatever  time  we  properly  should  have  now, 
and  I will  try  to  be  brief. 

I was  so  much  pleased  this  morning  with  the  general  attention 
that  was  paid  by  the  committee  in  its  very  full  attendance  when 
Mr.  Wilson  was  speaking,  and  what  impressed  me  so  much  was  the 
eulogy  that  Mr.  Wilson  paid  to  the  pioneers  in  the  packing  industry. 
I thought  the  committee  really  took  him  pretty  much  at  face  value 
with  respect  to  those  men  and  what  they  have  done.  And  then 
in  the  second  place  I thought  that  even  though  Tom  Wilson  might 
not  have  been  a pioneer,  he  was  pretty  near  in  the  same  class  with 
them,  and  his  statesmanlike  manner  of  handling  the  thing  would 
have  done  credit  even  to  the  pioneer  stock. 

Now  there  has  been  so  much  said  in  all  these  committees  here 
about  this  Federal  Trade  Commission  report.  This  morning  the 
whole  hearing,  the  whole  situation,  had  a so  much  higher  atmosphere 
than  that  sort  of  thing. 

There  are  many  morals  that  I would  like  to  point  out  with  respect 
to  the  construction  of  these  bills  here  and  their  defects  and  unfair- 
ness to  the  industry  as  well  as  to  individual  firms.  I shall  need  to 
point  back  to  what  happened  these  long  years  ago  now  with  the 
Federal  Trade  Commission.  But  I do  not  desire  to  get  this  discus- 
sion down  from  the  higher  tone  we  had  this  morning.  I should  like 


430 


MEAT  PACKER. 


at  any  other  time  to  talk  at  any  length  withlyou  people  on  what 
I think — and  I try  to  be  dispassionate — on  what  I know  was  a great 
injustice  that  was  done  to  a very  important  industry.  I do  not 
think  that  should  be  material  now.  I am  saying  this  at  this  time 
not  to  divert  the  attention  of  anyone  who  might  want  to  ask  me 
about  any  of  those  things  but  just  to  get  into  the  record  two  thoughts: 
First,  not  only  now,  but  even  from  the  very  first  day,  years  ago, 
when  the  Cudahy  Packing  Co.  people  saw  that  report,  we  have 
challenged  its  accuracy  as  regards  our  interests  in  every  respect, 
and  we  can  demonstrate,  I think,  at  any  time  that  what  is  said  is, 
first,  not  true,  and,  secondly,  that  the  inferences  drawn  are  entirely 
unjust. 

Now,  as  I say,  I put  that  in  just  to  keep  the  record  clean.  I 
don’t  want  to  go  into  the  discussion  now  because  I want  to  help 
bring  this  thing  out  where  I believe  it  will  be  more  helpful  to  the 
committee. 

Mr.  Clarke.  Just  a moment,  right  there.  For  how  long  have  you 
been  willing  that  proper  official  authorities  should  come  in  and  have 
all  of  your  records  so  that  they  could  study  them  and  investigate 
them,  etc.  ? 

Mr.  Creigh.  Well  now,  Mr.  Clark,  I happen  to  have  been  one  of, 
the  people,  I think,  in  this  country  who  perhaps  put  in  more  work; 
than  most  anybody  else,  outside  of  Congress,  in  helping  toward  the-; 
passage  of  the  Federal  Trade  Commission  act.  At  that  time  I thought 
it  was  a great,  constructive  piece  of  legislation.  I thought  it  was* 
going  to  be  helpful  to  business.  I still  think  there  are  infinite  pos-* 
sibilities  for  good  in  that  act,  but  I will  tell  you  that  if  ever  an  op-; 
timist  on  constructive  legislation,  dreaming  of  what  might  happen  j 
in  the  way  of  constructive  and  beneficial  results,  received  a disillu- 
sionment from  what  actually  did  happen  in  regard  to  legislation  of; 
that  kind  I got  it,  because  I have  been  in  the  very  front  of  the  firing; 
line  on  this  Federal  Trade  Commission  situation  ever  since  it  came' 
into  being.  \ 

Now  I don’t  know  how  many  of  you  may  be  familiar  with  the, 
Federal  Trade  Commission  act.  I will  assume  that  a lot  of  you; 
probably  are,  but  you  won’t  mind  if  I just  call  your  attention  to  one 
or  two  things  that  are  there.  That  is  what  puzzles  me  so  much  about 
all  of  this  situation. 

Now  here  is  the  Federal  Trade  Commission  act  that  was  passed 
September  26,  1914.  And  after  the  usual  definitions  common  to  such 
bills  there  are  two  general  sections,  one  is  section  5,  “that  unfair 
methods  of  competition  in  commerce  are  hereby  declared  unlawful.” 
Then  there  is  a long  procedure  outlined. 

Now  here  is  the  packing  industry,  and  here  is  the  Federal  Trade 
Commission  report  against  it,  and  here  is  charge  after  charge  that 
unfair  practices  have  in  the  past  been  indulged  in.  It  is  charged 
that  there  have  grown  up  many  unfair  practices  and  that  there  have 
been  violations  of  law,  and  yet  this  act  is  now  nearly  seven  years 
of  age,  and  the  commission  had  for  years  all  this  stuff  before  it  and 
with  all  that,  I know  of  not  a single  complaint  that  has  ever  been 
filed  against  a packing  company  referring  to  any  of  the  items  that 
are  now  charged  to  be  so  wrong.  Now  just  think  of  that  situation. 
The  Trade  Commission  with  many,  many  volumes  of  complaints  and 
charges,  with  ample  machinery  in  its  own  act,  and  no  commplaint 
ever  filed  that  touched  any  of  these  things. 


MEAT  PACKER. 


431 


Now  I must  qualify  that  in  one  respect.  There  are  a series  of 
complaints  filed  involving  certain  subsidiary  company  holdings  of 
the  packers,  and  those  are  progressing  in  an  orderly  way,  and  ought 
to  be  finally  decided  in  a correct  manner.  That  is  somewhat  judi- 
cial. They  are  outside  of  the  atmosphere  of  all  this  hurlyburly  and 
sensational  stuff.  And  there  is  also  one  other  complaint  that  was 
filed  against  Wilson  & Co.  on  the  theory  that  the  selling  of  some 
product  alleged  to  be  inferior — but  which  later  turned  out  to  be  not 
so — was  an  unfair  method  of  competition. 

Now  I think  I am  pretty  fairly  familiar  with  the  commission’s 
docket.  I will  have  to  qualify  my  general  statement  one  time  more. 
There  was  a complaint  filed  against  the  Cudahy  Packing  Co.  We 
wanted  to  have  a test  case.  What  do  you  suppose  it  was  ? Any  of 
these  packing-house  practices?  No.  That  we  made  “Old  Dutch 
Cleanser,  ” which  all  you  gentlemen  possibly  know  of,  and  that  our 
system  of  selling  it  was  supposed  to  be  not  in  accordance  with  the 
law.  We  worked  out  that  proceeding  in  an  orderly  way— in  the 
correct  way  under  the  act — to  a conclusion  that  I think  was  just. 

Now,  as  to  all  this  packing-house  business,  all  the  machinery  of  the 
Federal  Trade  Commission,  and  all  these  rules,  and  so  on,  and  nothing 
in  the  way  of  a single  complaint  as  to  the  packers’  general  practices 
that  I know  of  filed  as  to  any  of  them. 

Now,  as  regards  what  we  may  call  “having  access  to  books.”  Let 
us  take  section  6 of  this  same  act: 

“The  Commission  shall  also  have  power,”  now  listen,  “to  gather 
and  compile  information  concerning  and  to  investigate  from  time  to 
time  the  organization,  business  conduct,  practices,  and  manage- 
ments of  any  corporation  engaged  in  commerce,”  etc.  Now,  let  us 
go  ahead: 

“To  require,  by  general  or  special  orders,  corporations  engaged  in 
commerce  to  file  with  the  commission  in  such  form  as  the  commission 
may  prescribe,  annual  or  special,  or  both  annual  and  special  reports, 
or  answers  in  writing  to  specific  questions,”  etc. 

Ample  authority  under  the  law,  plenty  of  it  right  now. 

And  not  only  in  the  Trade  Commission  itself.  The  Bureau  of 
Markets  now  performs  a service,  and  this,  that,  and  other  bureaus  a 
similar  one.  Our  chief  trouble  on  the  end  of  giving  out  of  information 
is  that  we  have  so  many  of  them  that  it  is  almost  an  intolerable  bur- 
den at  times. 

Mr.  Aswell.  Did  you  support  this  measure  ? Did  you  support  the 
passage  of  this  act,  Mr.  Creigh  ? 

Mr.  Creigh.  I certainly  did.  And  as  I say,  I certainly  was  dis- 
illusioned as  regards  its  being  a constructive  piece  of  legislation,  as 
I hoped  it  would  be.  What  I hoped  would  come  out  of  that  act  was 
very  different  from  what  came  to  the  packers. 

Now,  as  regards  the  publicity,  item  F:  “This  commission  is  to 
make  public  from  time  to  time,”  etc.,  as  far  as  the  legislation  goes 
everything  there  would  under  existing  legislation  work  out  sensibly 
if  properly  handled  by  the  Trade  Commission  . 

Now,  let  us  get  down  to  one  of  the  other  features  that  perhaps  Mr. 
McLaughlin  will  be  interested  in.  Here  is  the  Trade  Commission  act 
covering  a procedure  in  regard  to  unfair  methods  of  competition; 
very  much  like  what  is  in  his  present  bill.  Now  let  us  look  at  the 
Clayton  Act.  Section  11  of  it  vests  the  Federal  Trade  Commission 


432 


MEAT  PACKER. 


with  the  authority  to  enforce  compliance  with  certain  sections. 
Those  sections  of  the  Clayton  Act  are  Nos.  2,  3,  7,  and  8. 

Now,  I won’t  take  the  time  to  read  them,  but  No.  2 applies  to  certain 
classes  of  discrimination.  The  very  same  thing,  Mr.  McLaughlin, 
that  happens  to  be  in  your  bill  there,  and  with  a thorough  procedure. 
And  yet,  again  there  have  as  yet  been  no  complaints,  and  no  pro- 
ceedings, with  the  possible  exceptions  I have  named.  None  that  go 
to  the  very  things  that  are  charged  in  this  big  voluminous  report  to 
be  so  wrong.  None  of  them  have  been  proceeded  on  at  all.  And  the 

E acker,  in  the  face  of  these  reports  here,  condemned  to  the  public  and 
aving  had  no  day  in  court  at  all.  In  my  case  I have  tried  and  tried 
and  tried  to  get  a hearing  before  the  commission,  challenging  them 
to  produce  the  evidence. 

Now,  as  I say,  I want  to  pass  all  that.  No  complaints  have  ever 
been  filed,  no  proper  hearing  ever  had,  and  yet  reports  and  charges 
heralded  abroad.  I think  an  injustice  has  been  done.  They  may 
have  their  side  to  the  story.  But  we  have  not  yet,  on  the  packer 
investigation,  with  all  this  expenditure  of  money  and  time  and  effort, 
gotten  to  the  point  where  even  now  this  committee  is  satisfied  that 
it  has  the  information.  Yet  here  is  already  sufficient  law.  And  I • 
venture  the  assertion  that  a million  dollars  has  been  spent  by  the 
Federal  Trade  Commission  in  getting  this  far.  Now  I am  not  very 
enthisuastic  as  to  what  will  happen  in  their  jurisdiction.  Now  let  us  ; 
see  what  we  can  do. 

This  morning,  as  I say,  I thought  Mr.  Wilson’s  treatment  of  the 
subject  was  very  statesmanlike.  Of  course,  it  might  be  said  that  it  i 
would  not  be  right  for  me  to  agree  with  him  in  all  respects,  so  here  is  ■! 
where  we  will  disagree  just  a little. 

While  I have  been  down  here  I have  been  very  much  interested 
in  reading  the  bill  recently  reported  by  this  committee,  House  bill 
5676,  on  the  subject  of  future  sales  and  trading  in  grain.  Now,  of  j 
course,  I don’t  want  to  get  into  the  merits  of  future  trading,  but  I ; 
want  to  compliment  the  committee  on  what  seems  to  me  one  of  the  J 
most  sensible  ideas  in  the  world.  Your  provisions  here  of  sections 
5,  6,  and  so  on,  under  which  boards  of  trade,  the  existing  machinery  i 
of  business,  with  all  their  rules  and  standards  and  grievance  commit-  : 
tees,  and  what-not,  are  in  effect  incorporated  reasonably  into  a nation- 
al system,  with  some  supervision  by  the  Secretary,  and  then  go  ahead 
and  adjust  business  to  present  forms.  Now,  that  is  sensible.  There 
is  such  a distinction,  gentlemen,  as  we  work  along  here,  between 
what  we  call  “ supervision” — the  word  is  used  very  inexactly  by 
most  of  us — and  what  we  call  “regulation.” 

We  have  had  a lot  of  talk  around  the  table  here  during  the  last 
few  days  on  the  act  to  regulate  commerce,  and  on  the  proposition 
of  the  abolishing  of  rebates,  and  so  on.  Now,  let  us  stop  and  try  to 
philosophize  about  that  just  a minute.  What  did  all  that  come  to, 
really?  In  the  old  days  of  wide-open  competition  between  carriers 
there  were  certain  laws  that  were  openly  violated.  How?  Giving 
rebates  is  one  form  of  it.  What  was  the-  rebate  after  all  ? It  was 
the  form  of  competition  that  was  left  open  to  the  carrier  upon  which 
he  cut  his  price  to  certain  customers.  Now,  that  was  your  competi- 
tion. This  wide-open  competition  business.  And  the  rebate  was  the 
thing  practically  that  was  almost  the  sole  field  left  for  the  carrier  to 
compete  in.  Now  it  has  changed.  The  rebating,  the  cutting  of 
prices,  in  other  words,  was  prohibited;  it  became  an  offense. 


MEAT  PACKEK. 


433 


Now,  how  many  packer  ills  that  we  have  been  discussing  around  the 
table  here  are,  possibly,  caused  more  by  too  much  competition  than 
by  too  little?  The  carriers  certainly,  and  the  general  public,  have 
not  been  hurt  by  getting  to  some  basis,  by  trying  to  regulate  or  super- 
vise or  even  prevent  their  competition.  Now,  I don’t  want  to  get 
down  to  the  point  where  there  is  no  competition,  but  I certainly 
think  that  by  exercising  the  normal  machinery  of  business  toward 
fair  practices,  reasonable  regulations,  standardized  grades,  ordinary 
conduct  of  business — all  those  things  that  stabilize  and  tend  to  make 
business  more  fair  and  make  business  more  efficient — I certainly 
think  that  that  is  a wonderful  field  to  work  in.  And  I think  that 
there  can  be  no  question  as  to  the  effectiveness  of  that,  as  against 
regulation,  where  the  Government  employee,  or  the  changing  Sec- 
retary, or  the  assistant,  who  must  be  paid  a small  salary,  gets  to 
where  he  can  regulate — that  is,  tell  Tom  Wilson  and  the  rest  of  them 
how  they  shall  conduct  their  business.  Isn’t  that  a strange  idea?, 

I want  the  Government  to  function  from  the  standpoint  of  what  I 
will  call  supervising.  I think  the  function  of  the  Government  is  to 
come  in,  and  as  between  a packing  company  and  a producer  who  may 
be  aggrieved,  or  a consumer  who  may  be  aggrieved,  afford  a mecha- 
nism where  the  difference  can  be  promptly  adjusted  between  the  con- 
tending parties.  That  is  the  Government’s  proper  sphere.  But  the 
sphere  of  doing  it  itself,  or  of  regulating  and  controlling  day-to-day 
management  of  a private  business,  is  not. 

# Now  let  us  try  to  work  that  out  back  again  to  the  carriers’  situa- 
tion, and  the  act  to  regulate  commerce. 

I have  been  before  that  commission  many,  many  times.  In  the 
old  days  I suppose  it  was  true  that  the  shippers  generally  thought 
very  well  of  the  commission,  perhaps  because  it  was  quite  generous  in 
the  reduction  of  rates  that  were  granted  in  many  hearings.  I do  not 
blame  the  commission  for  the  condition  that  the  carriers  are  now  in. 
I do  think,  though,  as  you  study  the  later  amendments  to  the  act 
that  you  will  find  that  one  of  the  large  features  of  difficulty  in  the 
present  situation  is  that  the  early  policy  of  making  the  commission 
the  arbiter,  the  judge,  if  you  please,  in  some  proceeding,  to  decide 
matters  between  two  contending  parties,  has  been  abandoned  in  the 
later  years.  More  and  more  the  commission  has  been  put  into  the 
regulation  field,  the  control  field,  telling  the  carriers  what  they  shall 
do,  and  I think  every  inch  of  progression  toward  control  and  operation 
in  an  executive  way  has  been  to  the  detriment  of  the  carriers  and  of 
the  public,  and  even  to  the  Government.  The  Government’s  sphere 
is  not  in  operation.  The  Government’s  sphere  is  confined  to  super- 
vision and  judicial  decisions  between  contending  parties.  Now 
there  is  the  big  principle  as  I see  it  and  as  applicable  to  the  bills  I am 
now  discussing. 

Let  me  take  up  these  propositions  further.  First  we  have  got  to 
consider  this  whole  governmental  theory  of  competition  in  business. 
We  talk  about  the  commerce  act  being  an  improvement.  Of  course 
it  was.  But  notice  the  philosophy  underneath  it.  It  is  that  the 
regulation,  almost  the  elimination  of  competition,  was  to  the  benefit 
of  everybody. 

The  second  principle  I would  emphasize  is  another  thing — the  dis- 
tinction between  supervision  and  control  or  regulation  which  directs. 

46985—21 28 


434 


MEAT  PACKER. 


Now,  here  is  the  third  thing:  I believe  the  packers  have  had  the 
most  difficulty  in  getting  it  across  to  the  public — the  fundamental 
distinction  between  a packing  business  arid,  we  will  say,  a steel 
or  the  ordinary  manufacturing  business.  The  raw  material  for  a 
steel  corporation  is  the  ore  bed  lying  in  Minnesota  or  in  Alabama  or 
or  any  place  where  it  may  happen  to  be.  It  is  not  subject  to  very 
great  deterioration.  When  the  demand  is  not  there,  why,  the  ore  lies 
in  the  ground. 

Now,  what  is  the  packers’  source  of  raw  material  ? Anything  that 
he  can  control?  Not  in  the  slightest  degree.  Here  are  millions  of 
farmers  and  live-stock  producers  scattered  all  other  the  country, 
very  much  unorganized,  subject  to  every  sort  of  a fluctuation, 
moving  independently  in  this  way,  and  that,  with  respect  to  our 
raw  material.  Now,  will  they  wait  for  the  packer  ? No;  the  finished 
animals  can  not  wait.  The  packer  has  no  control  over  the  sources 
of  production  nor  over  the  time  it  will  arrive  at  the  market.  The 
packer  has  no  control  over  the  physical  aspect — the  being  able  to 
keep  it.  Now,  isn’t  that  a marked,  fundamental  difference  between 
the  two  ? 

Now,  which  would  be  the  more  easy  to  regulate,  if  the  Government  ‘ 
came  to  do  it?  The  industry  which  works  on  a basic  raw  material  . 
which  is  relatively  stable,  latent  in  the  earth  and  easily  secured  when  ; 
needed,  or  this  delicate  thing  of  a perishable  nature,  with  fluctuating  j 
markets  and  infinite  complexity,  and  grades  and  kinds  without  end, 
so  that  even  the  men  in  the  business  wffio  have  been  in  the  business  »! 
for  30  years,  none  of  them  profess  to  know  all  about  it.  Such  a r 
difference  is  so  vital. 

Now,  let  us  go  to  the  other  thing.  This  talk  about  the  packers 
making  the  price.  I have  heard  a lot  of  you  around  the  table  asking  j 
as  to  whether  the  packer  would  be  not  able,  as  to  a certain  expense, 
to  put  it  into  his  price.  Why,  I think  that  would  be  true  with  the  1 
ordinary  manufacturer,  working  with  a commodity  like  iron,  or  some-  J 
thing  not  perishable.  But  stop  and  think  about  it  a little.  The  l 
farmer  makes  a very  frequent  complaint,  and,  I think,  quite  a justified  * 
complaint,  that  he  has  little  to  say  as  regards  the  price  that  he  is  to  1 
receive  for  his  live  stock  when  it  reaches  a market.  When  it  is  pre-  1 
pared  and  ready  for  market  it  has  got  to  be  sent,  it  has  got  to  be  sold. 
That  is  true.  But  now  look  at  our  position.  For  every  carload  of 
beef  cattle  or  hogs  that  a single  farmer  may  have  to  send  to  market, 
here  are  the  great  packers  who  will  be  owning  thousands  of  heads  of 
the  same  animals  either  in  process  of  preparation  or  in  their  selling 
agencies  for  purposes  of  sale.  Now,  when  we  get  down  into  the 
handling  of  a perishable  commodity  at  a branch  house,  with  more 
and  more  of  the  stuff  pushing  along  the  line,  coming  down  there,  the 
packers  simply  have  got  to  get  out,  and  sell  the  stuff  and  keep  on 
selling  it.  He  is  in  practically  the  same  position  with  the  completed, 
perishable  material  as  is  the  farmer  with  the  animals  at  the  stock- 
yard.  It  simply  has  got  to  be  sold. 

And  the  only  place  in  the  world,  in  my  judgment,  that  any  real 
assistance  can  be  given  to  the  public  is  by  getting  away  from  the 
prohibitions  of  the  Sherman  Act  here  which  more  or  less  makes  a 
realm  of  doubt  as  to  how  or  how  far  packers  may  cooperate  to  stabilize 
the  marketing  of  a product  and  to  reasonably  regulate  their  ship- 
ments into  a market  with  reference  to  its  demands.  If  you  will  pro- 


MEAT  PACKER. 


435 


vide  some  mechanism  under  which  we  can  get  into  that  field  with  all 
the  supervision  and  knowledge  and  publicity  in  the  world  about  it, 
there  is  the  greatest  chance  to  really  save  the  consumer  an  enormous 
amount  of  money;  to  make  the  packer’s  business  more  profitable, 
and  being  more  profitable  he  can  go  right  straight  back  to  the  live 
stock  producers  and  help  them.  But  with  these  principles  I have 
mentioned,  and  then  with  all  the  competition,  and  with  all  the  uncer- 
tainty working  in  there,  we  are  simply  trying  to  run  the  country 
now,  when  cities  have  grown  up,  on  the  basis  of  rules  of  law  that  seem 
largely  to  be  adjusted  to  the  old  country  store  ideas  of  50  years  ago. 
And  it  doesn’t  work.  It  can’t  work.  And  that  is  the  place  where 
some  help  can  be  given. 

Now,  I don’t  want  to  go  so  far  as  to  fix  the  price.  I want  plenty 
of  competition.  But  there  are  wastes  in  everything  of  that  kind  that 
can  be  eliminated  and  reduced,  and  what  is  to  our  benefit  is  to  the 
consumers’  benefit  and  to  the  benefit  of  the  producers.  I would  like 
to  see  some  effort  made  to  work  in  that  field. 

And  along  that  line  I tried  at  one  time  to  sketch  out  a little  bit 
of  a bill,  that  I thought  might  do  some  good  even,  and  I am  going 
to  leave  that  bill  here  with  you  as  a part  of  the  record.  It  will  be 
a sort  of  a curio  if  you  ever  get  to  reading  these  proceedings  at  some 
time  in  the  future.  But  what  I put  into  this  bill,  that  I am  going 
to  read  to  you  here  now,  is  a proposition  embracing  the  idea,  begin- 
ning at  section  10,  of  having  the  present  exchanges  in  all  the  live 
stock  centers  here,  put  on  a basis  where  the^  would  file  their  articles 
and  their  rules  and  regulations  and  their  grievance  committees  and 
all  that  machinery,  with  the  Secretary  of  Agriculture.  And  then 
he  can  approve  them  and  see  that  they  are  all  fair,  and  then  let  the 
exchanges  work  these  things  out  as  business  men.  Why,  what  I 
have  written  in  here  is  so  much  similar  to  what  you  have  in  the 
grain  bill — preserving  the  business  machinery  and  letting  the  regu- 
lating be  done  pretty  well  at  home — that  I am  beginning  to  wonder 
whether  perhaps,  having  thought  this  out  so  well  as  to  grain  you 
may  not  see  some  little  benefit  to  the  other  proposition  in  that 
point. 

This  section  in  here  is  largely  drawn  on  the  Canadian  live  stock 
law  idea,  and  I think  Mr.  Anderson  in  the  first  presentation  of  his 
bill  a year  or  more  ago,  put  the  Canadian  bill  in  the  record.  It  has 
been  commented  upon  very  favorably  by  Senator  Kendrick,  I 
think,  in  his  talk  on  the  Gronna  bill  in  the  last  session  of  Congress. 

Now  I am  going  to  take  the  time  of  the  committee  only  for  one 
further  proposition. 

The  Chairman.  Let  me  say,  in  that  connection,  we  conferred 
with  the  representatives  of  the  live  stock  exchanges  on  the  matter, 
and  I know  of  no  objection  to  incorporating  that  into  the  bill,  but 
I think  we  all  agree  that  it  is  covered  in  the  bill;  that  it  is  provided 
for  in  the  bill,  inasmuch  as  the  Secretary  deals  directly  with  the 
members  thereof,  and  would  have  jurisdiction  over  the  live  stock 
exchange. 

Mr.  Creigh.  That  is  right,  Mr.  Chairman,  unless  the  fundamental 
difference  is  that,  in  the  bill,  you  are  trying  to  regulate  the  ex- 
change through  the  Secretary.  Under  my  idea  I would  see  to  it 
that  the  exchanges’  rules  and  everything  are  fair,  and  then  let  them 
do  the  regulating.  You  see  there  is  a fundamental  difference  there. 
Business  can  run  one  way  and  it  can  not  the  other. 


436 


MEAT  PACKER. 

. Now,  the  only  other  point  that  I want  to  get  at  is  in  the  Haugen 
bill.  Take  the  Haugen  bill,  if  you  please,  section  204. 

Mr.  Ten  Eyck.  What  page  is  that  ? 

Mr.  Creigh.  On  page  5 of  the  draft  I have  of  the  Haugen  bill. 
Now,  in  this  little  draft  of  a bill  that  I have  prepared  I have  drawn, 
section  13  will  about  match  the  idea  of  section  204.  Now  notice  if 
you  please  that  section  204  reads: 

Whenever  the  Secretary  has  reason  to  believe  that  any  packer  has  violated  or 
is  violating  any  provision  of  this  title'  he  shall  cause  a complaint  in  writing  to  be 
served  upon  the  packer,  specifying  the  alleged  violations,  and  requiring  the  packer 
to  attend  and  testify  at  a hearing  at  a time  and  place  designated  therein,  at  least 
thirty  days  after  the  service  of  such  complaint;  and  at  such  time  and  place  there 
shall  be  afforded  th  packer  a reasonable  opportunity  to  be  heard  in  person  or  by 
consul  and  through  witnesses. 

Now,  I have  had  in  mind  so  much,  as  you  can  see  here,  this  ex 
parte  procedure  on  the  part  of  the  Federal  Trade  Commission  in  the 
packer  case,  that  I sometimes  wonder  as  I read  this  section  here, 
exactly  what  is  written  into  it  in  technical  detail.  Here  it  says  that 
the  packer,  a complaint  being  filed,  “ shall  be  afforded  a reasonable 
opportunity  to  be  heard  in  person  or  by  counsel.”  Now,  it  is  very  . 
obvious  that  before  the  complaint  can  be  prepared  by  the  Secretary 
he  must  have  had  a whole  lot  of  evidence,  or  people  writing  him  letters 
or  making  the  complaint.  There  is  nothing  stated  in  here  that  at  the  ; 
hearing  which  will  be  afforded  the  packer,  the  evidence  in  the  case 
should  be  presented.  Nothing  in  there  that  when  the  packer  is  , 
afforded  a hearing  he  shall  have  the  right,  as  a matter  of  right,  to  ? 
cross-examine  the  witnesses  who  may  at  some  other  stage  of  the  mat-  ] 
ter  have  appeared  against  him. 

Mr.  Kincheloe.  You  mean  in  the  proceeding  before  the  Secretary 
of  Agriculture,  in  the  initial  trial  before  the  Secretary  of  Agriculture  ? ; 

Mr.  Creigh.  Yes,  sir.  Now  the  appeal  provision  comes  along  and  ! 
says  that  the  Secretary  of  Agriculture  shall  make  a transcript  of  the 
evidence,  if  you  please,  and  I say  that  under  the  procedure  here  it  is  ! 
thoroughly  possible  that  the  defendant  who  may  have  had  a hearing  * 
may  never,  until  he  gets  to  the  Circuit  Court  of  Appeals,  have  had  a \ 
chance  to  look  at  the  evidence  upon  which  the  finding  has  been  made,  i 
He  certainly  in  this  bill  has  not  the  right  to  cross-examine  a single 
witness. 

Now,  those  things  might  and  possibly  would  be  taken  care  of  by  the 
Secretary  in  making  his  regulations  for  procedure.  But  I do  think 
that  everybody  in  the  packer  world  would  feel  considerably  more 
relieved  if  there  was  written  into  section  204,  or  these  other  sections 
in  the  other  bills  which  correspond  to  that,  something  like  this, 
about — and  this  is  the  section  13,  as  I had  it  in  what  I say  is  the  bill 
that  I prepared,  and  which  I am  going  to  place  in  the  record: 

“ Whenever  the  Secretary  has  reason  to  believe  that  any  dealer  has 
violated” — dealer  means  a packer  here — -“or  is  violating  any  pro- 
vision of  this  title,  he  shall  cause  a complaint  in  writing,  together  with 
a brief  statement  of  the  facts  in  support  thereof” — you  will  notice 
here  that  in  section  205,  and  in  the  other  sections  in  the  other  bills, 
that  the  packer  might  be  adjudged  guilty  of  a violation  that  was  not 
even  the  one  in  the  complaint. 

Mr.  Purnell.  It  provides  that  the  complaint  shall  specify  the 
alleged  violation. 


MEAT  PACKER. 


437 


Mr.  Creigh.  Well,  I should  say  “ specifying  the  alleged  violation’7 
is  quite  different  from  “ together  with  a brief  statement  of  the  facts 
in  support  thereof.77  Any  one  can  easily  make  a.  complaint,  but  we 
ought  to  have  a statement  of  the  facts  upon  which  it  is  based. 

Mr.  Purnell.  I see. 

Mr.  Creigh.  Now  let  us  come  to  item  B,  if  you  please,  in  the  Hau- 
gen bill.  It  says: 

“If,  after  such  hearing,  the  Secretary  finds  that  the  packer  has 
violated  or  is  violating77 — what?  The  law,  “as  charged  in  the  com- 
plaint77? Why  no.  It  says,  “or  is  violating  any  provision  of  this 
title.77  That  is  one  of  the  most  curious  situations,  when  you  come  to 
think  about  it.  Not  only  might  it  occur  that  the  evidence  would  not 
be  known,  but  you  may  be  found  guilty  of  something  different  than 
that  with  which  you  are  charged.  Now  I know  that  those  things  are 
purely  inadvertent.  We  all  want  to  work  this  down  to  some  fair  and 
definite  basis. 

I will  now  finish  the  reading  of  this  section  that  I was  proposing. 

Mr.  Voigt.  Now  just  a minute,  there.  If  the  Secretary  causes  a 
complaint,  in  writing,  to  be  served  on  the  packer  as  provided  by 
section  204,  doesn’t  that  give  the  packer  specific  notice  of  the  charge 
against  him  ? 

Mr.  Creigh.  Well,  now,  it  is  made  unlawful  for  the  packers  “to 
engage  in  or  use  any  unfair  or  deceptive  practice  in  commerce.77  I 
say  that  under  this  language  here  a complaint  might  be  filed  even  in 
that  elastic  fashion. 

Mr.  Voigt.  Do  you  mean  simply  alleging  those  words  ? 

Mr.  Creigh.  Why,  it  says,  “complaint  in  writing77 — “specifying 
the  alleged  violations.77 

Mr.  Voigt.  Why,  yes;  that  would  be  like  any  other  complaint;  give 
you  notice  of  what  is  claimed  against  you. 

Mr.  Creigh.  Well,  isn’t  this  provision  of  mine  more  fair:  “He  shall 
cause  a complaint  in  writing,  together  with  a brief  statement  of  the 
facts  in  support  thereof,  to  be  served,77  etc  ? 

Mr.  Voigt.  That  is,  you  would  want  this  bill  amended  so  that  when 
the  complaint  is  served  on  you  you  are  also  given  a copy  of  the  evi- 
dence on  which  the  complaint  is  based  ? 

Mr.  Creigh.  Well,  “a  brief  statement  of  the  facts.”  Because, 
although  I am  going  to  hear  the  evidence  at  the  hearing,  yet  if  I know 
the  facts  in  advance  I might  want  to  say,  “Sure,  enter  your  order  to 
cease  and  desist.”  If  I know  the  facts  I might  be  willing  to  say,  “I 
know  what  it  is  all  about;  enter  your  order.” 

Mr.  Voigt.  Well,  now,  when  a complaint  is  filed  in  court  where  a 
man  is  sued — a complaint  is  either  served  on  him  or  filed  in  court — he 
is  not  given  any  notice  of  the  evidence  against  him. 

Mr.  Creigh.  Well,  but  wait  a minute.  Certainly  in  every  pleading 
that  I know  anything  about  he  is  given,  not  the  ultimate  facts  or  evi- 
dence, but  he  is  given  something  in  the  way  of  an  alleged  statement 
of  facts. 

Mr.  Purnell.  Not  under  the  code,  as  a rule. 

Mr.  Creigh.  Well,  under  the  Nebraska  code,  I am  thinking  about, 
we  get  it. 

Mr.  Purnell.  Well,  I am  thinking  of  the  Indiana  code. 

Mr.  Kincheloe.  I understand  your  objection  is  that  in  the  initial 
trial  before  the  Secretary  of  Agriculture  that  all  you  are  furnished 


438 


MEAT  PACKER. 


with  is  a statement  setting  out  the  violations,  and  that  you  are  denied 
knowledge  of  the  facts  upon  which  that  complaint  is  based,  when 
you  go  to  trial  before  the  Secretary  of  Agriculture  ? 

Mr.  Creigh.  Quite  true. 

Mr.  Kincheloe.  And  that  you  can  not  know  the  facts  upon  which 
it  is  based  until  you  get  into  the  circuit  court  of  appeals  under  this 
section  ? 

Mr.  Creigh.  Well,  in  the  way  it  is  written  there  I may  not  know 
the  facts  until  then. 

Mr.  Kincheloe.  Except  under  his  rules  and  regulations. 

Mr.  Creigh.  Yes.  In  the  first  place  section  204  has  a grave  defect 
in  that  the  complaint  is  not  necessarily  such  as  to  tell  us  what  actual 
matter  is  being  charged. 

Mr.  Voigt.  Well,  do  you  really  think  that  any  Secretary  of 
Agriculture  would  be  so  asinine  as  to  serve  a complaint  on  anyone 
that  did  not  state  the  facts  in  the  case  ? 

Mr.  Creigh.  Well,  now,  let  us  not  put  it  in  terms  of  asinine.  Of 
course  I would  not  say  that.  But  I certainly,  in  connection  with 
Government  practice  here  involving  regulations  and  charges  and  all 
of  that,  in  nearly  every  bureau  of  the  Government  find  it  one  of 
the  most  difficult  things  in  the  world  to  get  the  Government  in 
advance  to  go  definitely  on  record  as  to  exactly  what  it  is  that  they 
are  claiming.  Now,  I can  see  no  reason  in  the  world  why  it  should 
not  be  specifically  written  in  the  complaint.  I don’t  want  all  his 
evidence,  but  I can  see  no  reason  why  the  complaint  shall  not  at  least 
have  a brief  statement  of  the  facts.  As  I say,  if  I could  see  what  it 
was  that  they  were  making  complaint  about,  I might  want  to  have 
the  order  entered  up  immediately,  and  be  glad  to  do  it,  without 
coming  to  Washington  to  find  out,  or  waiting  for  a hearing  to  come 
along,  thus  saving  the  Government  and  myself  expense. 

Mr.  Voigt.  It  is  provided  in  lines  14  and  15  that  the  Secretary 
shall  cause  “a  complaint  in  writing  to  be  served  upon  the  packer, 
specifying  the  alleged  violations.” 

Mr.  Creigh.  Yes,  sir. 

Mr.  Voigt.  That  looks  to  be  reasonably  sufficient  to  me. 

Mr.  Creigh.  Well,  now,  my  point  is  that  no  language  could  be 
more  indefinite  in  the  way  of  specifying  violations  than  this  language 
in  section  203.  Just  think  how  wide  they  are.  Here  is  a prohibition 
against  unfair  or  deceptive  practice.  Now,  that  is  a violation — “a 
deceptive  practice.”  Now,  you  may  say  that  we  have  some  decep- 
tive practice  that  we  have  been  using  here  in  connection  with  our 
selling  business.  We  would  not  necessarily  know  what  it  was. 
Under  the  meat  inspection  act,  under  the  term  in  the  act  preventing 
the  use  of  a deceptive  term,  why  the  Secretary  even  now  fixes  the 
formula  for  the  making  of  sausage,  because  he  says,  “If  you  don’t 
make  it  according  to  my  formula  you  can  not  call  it  sausage  because 
it  will  then  be  deceptive.”  Now,  look  at  that  for  a stretch,  if  you 
please,  upon  indefinite  language. 

Now,  I haven’t  anything  against  the  meat  inspection  act,  but  as  I 
say,  there  are  extreme  cases  of  stretching  the  language  and  making 
it  apply  in  some  very  strange  ways.  There  are  so  many  unusual 
and  utterly  unexpected  things  brought  up  under  it  that  are  not  at  all 
what  Congress  meant  that  you  would  be  astonished  if  you  knew 
about  them.  Why,  you  pass  an  act  that  is  contained  in  two  or  three 


MEAT  PACKER. 


439 


paragraphs  at  the  most,  and  when  you  come  along  to  the  regulations 
under  the  act  they  embrace,  I suppose,  a hundred  pages  now.  There 
is  such  a mass  of  things  in  there  that  you  would  be  astonished  at  it 
all.  Here,  for  example,  is  an  illustration  of  what  has  been  attempted. 
It  is  a certain  amount  of  expense  for  a packer  to  keep  up  inspection 
in  a branch  house  establishment. 

Meats  properly  inspected  would  be  sent  to  the  ordinary  branch 
house  and  handled  in  a sanitary  way  through  the  branch  house  and 
distributed.  Now  some  packer  comes  in  and  he  wants  to  smoke 
a ham.  Immediately,  in  order  to  send  it  interstate,  he  has  to  have 
inspection  there.  Suppose  he  doesn’t  want  to  send  the  ham  inter- 
state, and  he  doesn’t  want  to  have  that  small  amount  of  inspection. 
All  right.  Now  they  used  to  have  a regulation  that  in  such  a case 
you  couldn’t  ship  a carcass  of  beef  interstate  out  of  a branch  house 
which  smoked  a ham  unless  that  was  inspected.  They  used  to  say 
this,  and  we  couldn’t  ship  except  under  such  and  such  condition; 
not  warranted  by  the  law,  and  a sheer  stretch  of  their  authority. 

Mr.  Purnell.  Do  you  believe  a bald  statement  of  complaint 
merely  charging  that  you  had  engaged  in  an  unfair  practice — well, 
to  use  the  exact  language  here,  a bald  statement  to  the  effect  that 
you  had  “ engaged  in  an  unfair  practice”  would  come  within  the 
requirement  of  section  204  ? Without  specifying  the  alleged  viola- 
tions? It  seems  to  me  that  the  word  “ specifying”  has  a little 
broader  meaning,  contemplates  a little  more  than  the  mere  bald 
statement  that  you  have  engaged  in  an  unfair  practice. 

Mr.  Creigh.  All  right,  but  here  is  the  Cudahy  Packing  Co.  I will 
take  that  company  as  an  illustration,  because  I am  with  them.  We 
have  10,000  employees  and  100  branch  houses.  Now  I might  be 
very  much  interested  in  knowing  the  town  at  which  the  alleged 
offense  took  place,  or  where  the  employee  who  did  it  was  located,  or 
the  character  of  the  transaction,  or  whatever  it  was.  I want  to 
know  all  about  it.  And  what  is  there  unreasonable  about  that? 
Some  evidence  must  be  produced  at  the  hearing.  If  my  interpreta- 
tion of  the  bill  is  right,  that  is,  that  I might  be  successfully  prose- 
cuted without  ever  seeing  the  evidence,  or  knowing  the  alleged  facts 
at  the  basis  of  complaint,  and  while  I think  that  such  a possibility  is 
within  204,  I don’t  think  you  intended  that. 

Mr.  Purnell.  I don’t  think  it  is  the  intent  of  any  member  of  this 
committee  to  take  any  unfair  advantage  of  the  defendant,  especially 
under  your  reasoning. 

Mr.  Creigh.  Certainly  not,  but  let  us  patch  it  up  in  advance. 

The  Chairman.  In  your  language  it  would  be  largely  in  the  dis- 
cretion of  the  Secretary  as  to  what  he  would  specify. 

Mr.  Creigh.  Yes;  a brief  statement. 

The  Chairman.  Practically  the  same  thing. 

Mr.  Creigh.  Well,  mine  is  so  much  better  than  the  other  one,  that 
let  us  have  mine.  Now  then  this  complaint  is  to  be  served  upon 
him;  he  is  to  be  required — 

to  answer  such  complaint  at  a time  and  place  designated  therein,  at  least  30  days 
after  the  service  of  such  complaint;  and  thereupon  a full  hearing  shall  be  had,  at 
which  time  and  place  the  dealer  shall  be  afforded  a reasonable  opportunity  to  be 
heard  in  person  or  by  counsel  and  through  witnesses,  with  the  further  right  to  ex- 
amine all  evidence  in  the  proceedings  and  to  cross-examine  witnesses,  under  such 
regulations  as  the  Secretary  may  prescribe. 


440 


MEAT  PACKER. 


Now  that  is  all  I care  to  say  on  that,  and  I will  leave  my  little 
draft  of  bill  with  you,  and  ask  that  it  be  placed  in  the  record. 

The  Chairman.  Without  objection  it  may  be  inserted. 

(The  bill  presented  by  Mr.  Creigh  to  the  committee  is  herewith 
printed  in  full,  as  follows :) 

Tentative  draft  of  a bill  to  regulate  and  supervise  interstate  and  foreign  commerce  in  live  stock,  and  for 

other  purposes.] 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  of  the  United  States  of  America 
in  Congress  assembled,  That  this  act  may  be  cited  as  the  “Stockyards  and  live  stock 
act,  1921.” 

Sec.  2.  That  when  used  in  this  act — 

The  term  “person”  includes  individuals,  partnerships,  corporations,  and  associa- 
tions. 

The  term  “live  stock”  means  live  or  dead  cattle,  sheep,  or  swine. 

The  term  “commerce”  means  commerce  in  live  stock  among  the  several  States  or 
with  foreign  nations,  or  in  any  Territory  or  possession  of  the  United  States  or  in  the 
District  of  Columbia,  or  between  any  such  Territory  or  possession  and  any  State, 
Territory,  possession  or  foreign  nation,  or  between  the  District  of  Columbia  and  any 
State,  Territory,  possession,  or  foreign  nation. 

For  the  purpose  of  this  act  (but  not  in  anywise  limiting  the  foregoing  definition) 
a transaction  in  respect  to  any  live  stock  shall  be  considered  to  be  in  commerce  if 
such  live  stock  is  part  of  that  current  of  commerce  usual  in  the  live-stock  and 
meat-packing  industries,  whereby  live  stock  is  sent  from  one  State  with  the  expcta- 
tion  that  they  will  end  their  transit,  after  purchase,  slaughter  or  manufacture,  in 
another;  including  in  addition  to  cases  within  the  above  general  description,  all  cases 
where  purchase  or  sale  is  either  for  shipment  to  another  State,  or  for  slaughter  of 
live  stock  within  the  State  and  the  shipment  outside  the  State  of  the  products  re- 
sulting from  such  slaughter.  Live  stock  normally  in  such  current  of  commerce  shall 
not  be  considered  out  of  such  current  through  resort  being  had  to  any  means  or  device- 
intended  to  remove  transactions  in  respect  thereto  from  the  provisions  of  this  act. 
For  the  purpose  of  this  paragraph  the  word  “State”  includes  Territory,  the  District 
of  Columbia,  possession  of  the  United  States,  and  foreign  nation. 

The  term  “stockyard”  means  any  place,  establishment,  or  facility  commonly 
known  as  stockyards,  conducted  or  operated  for  compensation  or  profit  as  a public 
market,  consisting  of  pens  or  other  inclosures  and  their  appurtenances,  in  which  live 
cattle,  sheep,  or  swine  are  received,  held,  or  kept  for  sale  or  shipment  in  commerce. 
This  title  shall  not  apply  to  a stockyard  in  any  calendar  year  if  in  the  preceding 
calendar  year  there  were  not  handled  at  such  stockyard  150,000  or  more  head  of  cattle 
or  500,000  or  more  head  of  hogs. 

The  Secretary  shall  from  time  to  time  ascertain,  after  such  inquiry  as  he  deems 
necessary,  the  stockyards  which  come  within  the  foregoing  definition,  and  shall  give 
notice  thereof  to  the  stockyard  owners  concerned,  and  give  public  notice  thereof  by 
posting  copies  of  such  notice  in  the  stockyard,  and  in  such  other  manner  as  he  may 
determine.  After  the  giving  of  such  notice  to  the  stockyard  owner  and  to  the  public, 
the  stockyard  shall  remain  subject  to  the  provisions  of  this  title  until  like  notice  is 
given  by  the  Secretary  that  such  stockyard  no  longer  comes  within  the  foregoing 
definition. 

The  term  “stockyard  services”  means  services  or  facilities  furnished  at  a stockyard 
by  a stockyard’s  company  or  any  owner  of  a stockyard  or  a subsidiary  thereof  or  by 
commission  men  or  other  market  agencies  in  connection  with  the  receiving,  marketing, 
feeding,  watering,  holding,  delivery,  shipment,  weighing,  or  handling,  in  commerce, 
of  live  stock. 

The  term  “market  agency”  means  any  person  engaged  in  the  business  of  buying 
or  selling  in  commerce  live  stock  at  a stockyard  on  a commission  basis. 

The  term  “dealer”  means  any  person,  not  a market  agency,  engaged  in  the  busi- 
ness of  buying  or  selling  in  commerce  live  stock  at  a stockyard,  either  on  his  own 
account  or  as  the  employee  or  agent  of  the  vendor  or  purchaser.  This  term  shall  in- 
clude packers  and  butchers  to  the  extent  that  they  deal  in  commerce  at  such  stock- 
yards  but  shall  not  include  any  farmer  selling  live  stock  produced  or  handled  on  his 
own  ranch  or  farm,  or  buying  it  for  such  uses. 

The  term  “Secretary’  ’ means  the  Secretary  of  Agriculture. 

The  term  “stockyard  owner”  means  any  person  engaged  in  the  business  of  con- 
ducting or  operating  a stockyard. 


MEAT  PACKER. 


441 


Sec  3 It  shall  be  the  duty  of  every  stockyard  owner  and  market  agency  to  furnish 
upon  reasonable  request,  without  discrimination,  reasonable  services  at  such  stock- 

^Sec.  4.  All  rates  or  charges  made  for  any  stockyard  services  furnished  at  a stock- 
vard  by  a stockyard  owner  or  market  agency  shall  be  just,  reasonable,  and  non- 
discriminatory,  and  any  unjust,  unreasonable,  or  discriminatory  rate  or  charge  or 

practice  is  prohibited  and  declared  to  be  unlawful. 

Sec  5 (a)  Within  60  days  after  the  Secretary  has  given  public  notice  that  a stock- 
yard  is  within  the  definition  of  section  2,  by  posting  copies  of  such  notice  m the 
stockyard,  the  stockyard  owner  and  every  market  agency  at  such  stoJkyf  f 
with  the  Secretary,  and  print  and  keep  open  to  public  inspection  at  the  stockyard, 
schedules  showing  all  rates  and  charges  for  the  stockyard,  services  furnished  by  such 
person  at  such  stockyard.  If  a market  agency  commences  business  at  the  stocky  ard 
after  the  expiration  of  such  60  days,  such  schedules  must  be  filed  before  any  stock- 

yard  services  are  furnished.  , J . ■]  „ 

(b)  Such  schedules  shall  plainlv  state  all  such  rates  and  charges  m such  detail  a*  the 

Secretary  mav  require,  and  shall  also  state  any  rules  or  regulations  which  m any  manner 

change,  affect,  or  determine  any  part  or  the  aggregate  of  such  rates  or  charges,  or  the 
value  of  the  stockyard  services  furnished . The  Secretary  may  determine  and  prescribe 
the  form  and  manner  in  which  such  schedules  shall  be  prepared,  arranged,  and  posted 
and  may  from  time  to  time  make  such  changes  m respect  thereto  as  may  be  found 

6 Yc^No  changes  shall  be  made  in  the  rates  or  charges  so  filed  and  published  except 
after  10  davs’  notice  to  the  Secretary  and  to  the  public  filed  and  published  as  aforesaid 
which  shall  plainly  state  the  changes  proposed  to  be  made  and  the  time  such 
changes  will  go  into  effect:  but  the  Secretary  may  for  good  cause  shown,  allow 
changes  on  less  than  10  days’  notice,  or  modify  the  requirements  of  this  section 
in  respect  to  publishing,  posting,  and  filing  of  schedules,  either  m particular  instances 
or  bv  a general  order  applicable  to  special  or  peculiar  circumstances  or  conditions. 

(d)  The  Secretary  mav  reject  and  refuse  to  file  any  schedule  tendered  for  filing  which 
does  not  provide  and  give  lawful  notice  of  its  effective  date  and  any  schedule  so 
rGiGctod  by  th.6  SGCXst&rv  shall  t>6  void  and  its  use  shad  bo  unlawtuh 

(e)  Whenever  there  is  filed  with  the  Secretary  any  schedule  stating  a new  rate  or 
charge,  or  a new  regulation  or  practice  affecting  any  rate  or  charge,  the  Secretary  may,, 
either  upon  complaint  or  upon  his  own  initiative  without  complaint,  at  once  and  it 
he  so  orders  without  answer  or  other  formal  pleading  by  the  person  filing  such  schedule 
but  upon  reasonable  notice,  enter  upon  a hearing  concerning  the  lawfulness  of  suefi 
rate,  charge,  regulation,  or  practice,  and  pending  such  hearing  and  decision  thereon, 
the  Secretary  upon  filing  with  such  schedule  and  delivering  to  the  person  filing  it  a 
statement  in  writing  of  his  reasons  for  such  suspension,  may  suspend  the  operation  of 
such  schedule  and  defer  the  use  of  such  rate,  charge,  regulation,  or  practice,  but  not 
for  a longer  period  than  30  days  beyond  the  time  when  it  would  otherwise  go  into 
effect;  and  after  full  hearing,  whether  completed  before  or  after  the  rate,  charge,  regu- 
lation or  practice  goes  into  effect,  the  Secretary  may  make  such  order  with  reference 
thereto  as  would  be  proper  in  a proceeding  initiated  after  it  had  become  effective.  If 
any  such  hearing  can  not  be  concluded  within  the  period  of  suspension  the  Secretary 
may  extend  the  time  of  suspension  for  a further  period  not  exceeding  30  days,  and  if 
the  proceeding  has  not  been  concluded  and  an  order  made  at  the  expiration  of  such  3U 
days,  the  proposed  change  of  rate,  charge,  regulation,  or  practice  shall  go  into  effect 

at  the  end  of  such  period.  . _ . . . . 

(f)  After  the  expiration  of  the  60  days  referred  to  m sqodi vision  (a)  no  person  shall 

carrv  on  the  business  of  a stockyard  owner  or  market  agency  unless  the  rates  and 
charges  for  the  stockvard  services  furnished  at  the  stockyard  have  been  filed  and  pub- 
lished in  accordance  'with  this  section  and  the  orders  of  the  Secretary  made  thereunder;, 
nor  charge,  demand,  or  collect  a greater  or  less  or  different  compensation  tor  such 
services  than  the  rates  and  charges  specified  in  the  schedules  filed  and  m effect  at 
the  time;  nor  refund  or  remit  in  any  manner  any  portion  of  the  rates  or  charges  so 
specified;  nor  extend  to  any  person  at  such  stockyard  any  stockyard  services  except 
such  as  are  specified  in  such  schedules.  . . 

(g)  Whoever  fails  to  comply  with  the  provisions  of  this  section  or  any  regulation  or 
order  of  the  Secretary  made  thereunder,  shall  be  liable  to  a penalty  of  not  rpore  ^nan 
$500  for  each  such  offense  and  not  more  than  $250  for  each  day  it  continues,  which  shall 
accrue  to  the  United  States  and  may  be  recovered  in  a civil  action  brought  by  the 

United  States.  . . , . . , 

fh)  Whoever  willfullv  fails  to  comply  with  the  provisions  of  this  section  or  of  any 
regulation  or  order  of  the  Secretary  made  thereunder,  shall  on  conviction  be  fined  not 
more  than  $1,000,  or  imprisoned  not  more  than  one  year,  or  both. 


442 


MEAT  PACKER. 


Sec.  6.  It  shall  be  the  duty  of  every  stockyard  owner  and  market  agency  to  estab- 
lish, observe,  and  enforce  just,  reasonable,  and  nondicrimnatory  regulations  and  prac- 
tices in  respect  to  the  furnishing  of  stockyard  services,  and  every  unjust,  unreasonable, 
and  discriminatory  regulation  or  practice  of  every  stockyard  owner,  market,  agency, 
or  dealer  is  prohibited  and  declared  to  he  unlawful. 

Sec.  7.  It  shall  be  unlawful  for  any  dealer  for  the  purpose  and  with  the  effect  of 
unduly  restraining  commerce  or  creating  a monopoly  to — 

(a)  Engage  in  or  use  any  unfair,  unjustly  discriminatory,  or  deceptive  practice  or 
device  in  commerce. 

(b)  Make  or  give  in  commerce  any  undue  or  unreasonable  preference  or  advantage 
to  any  particular  person  or  locality  in  any  respect  whatsoever. 

(c)  Sell  or  otherwise  transfer  to  or  for  any  other  dealer,  or  buy  or  otherwise  receive 
from  or  for  any  other  dealer,  any  live  stock  for  the  purpose  or  with  the  effect  of  appor- 
tioning the  supply  in  commerce  between  any  such  dealers. 

(d)  Sell  or  otherwise  transfer  to  or  for  any  other  person,  or  buy  or  otherwise  receive 
from  or  for  any  other  person,  any  live  stock  for  the  purpose  or  with  the  effect  of  manip- 
ulating prices  in  commerce. 

(e)  C onspire,  combine,  agree,  or  arrange  with  any  other  person  to  do,  or  aid  or  abet 
the  doing  of,  any  act  made  unlawful  by  subdivision  (a),  (b),  (c),  fd),  or  (e). 

Sec.  S.  (a)  If  any  stockyard  owner,  market  agency,  or  dealer,  violates  any  of  the 
provisions  of  section  3,  4,  5,  6,  or  7 applicable  to  him,  or  any  order  of  the  Secretary 
made  under  this  title,  he  shall  be  liable  to  the  person  or  persons  injured  thereby  for  the 
full  amount  of  damages  sustained  in  consequence  of  such  violation. 

(b)  Such  liability  may  be  enforced  either  (1)  by  complaint  to  the  Secretary  as  pro- 
vided in  section  .12  or  (2)  by  suit  in  any  district  court  of  competent  jurisdiction;  but 
this  section  shall  not  in  any  way  abridge  or  alter  the  remedies  now  existing  at  common 
law  or  by  statute,  but  the  provisions  of  this  act  are  in  addition  to  such  remedies. 

Sec.  9.  There  shall  be  a live-stock  exchange  in  connection  with  each  stockyard 
operated  under  this  act,  which  shall  be  publicly  designated  as  “U.  S.  supervised.” 
Every  market  agency  or  dealer  doing  business  at  such  stockyard  may  become  a mem- 
ber thereof  in  conformity  with  the  requirements  for  the  various  classes  of  business  as 
specified  in  the  articles  of  association  or  by-laws  of  the  said  exchange. 

Nothing  in  this  act  or  in  any  regulation  made  hereunder  shall  take  away  or  in  any 
manner  limit  the  right  of  any  farmer  or  drover  to  buy  or  sell  his  live  stock  for  his  own 
individual  requirements  (but  not  as  a regular  business)  at  any  such  stockyard. 

Sec.  10.  A United  States  supervised  live-stock  exchange  shall  not  be  operated  until 
its  articles  of  association  or  by-laws  to  regulate  the  management  and  business  of  such 
exchange  have  been  duly  approved  by  the  secretary  and  a written  notification  of 
such  approval  or  consent  by  the  secretary  to  the  secretary  of  such  live-stock  exchange. 

Such  by-laws  should  provide  for  the  admission  as  members  of  such  live-stock  ex- 
change of  all  persons  who  desire  to  carry  on  the  business  of  market  agency  or  dealer 
on  such  terms  and  conditions  as  may  be  fixed  by  the  by-laws  and  such  by-laws  shall 
require  every  member  of  the  exchange  to  furnish  sufficient  satisfactory  security  for 
the  proper  accounting  by  such  member  of  the  proceeds  of  any  sales  received  by  him 
or  for  the  performance  of  any  purchase  or  sale  made  by  or  to  him. 

Sec.  11.  Such  by-laws  shall  further  provide  for  the  creation  and  conduct  of  a 
grievance  committee  and  of  a transportation  committee,  in  addition  to  the  usual 
duties  incident  to  such  committee. 

(a)  The  grievance  committee  shall  be  especially  charged  with  the  duty  of  receiving, 
investigating,  and  making  findings  upon  all  complaints  of  any  aggrieved  party, 
which  may  be  filed  with  it  within  30  days  of  the  date  of  the  transaction  complained 
of. 

(b)  The  transportation  committee  shall  be  especially  charged  with  the  duty  of 
cooperating  with  market  agencies,  dealers,  live-stock  shippers,  stockyard  owners  or 
operators,  and  transportation  companies,  for  the  stabilizing  and  regulating  of  live- 
stock receipts  and  of  shipments  to  and  from  said  stockyard.  The  acts  of  all  the  members 
of  such  live-stock  exchange,  when  done  in  conformity  with  any  action  of  any  such 
transportation  committee  by  and  with  the  authority  of  the  Secretary  or  any  of  his 
subordinates,  shall  not  be  deemed  to  be  in  violation  of  any  of  the  acts  mentioned  in 
section  22  hereof  up  until  the  time  when  notice  to  the  contrary  shall  be  given  by  the 
Secretary. 

Said  live  stock  exchange  and  its  members  may  further  cooperate  with  the  Secretary 
in  the  securing,  formulating,  and  publishing  of  information  respecting  receipts,  prices, 
market  conditions,  and  all  other  items  which  are  deemed  to  be  of  interest  or  value 
to  farmers  and  shippers  to  said  stockyards  or  to  other  persons. 

Sec.  12.  (a)  Any  person  complaining  of  anything  done  or  omitted  to  be  done  by 
any  stockyard  owner,  market  agency,  or  dealer  (hereinafter  in  this  section  referred 


MEAT  PACKER. 


443 


to  as  the  “defendants”)  in  violation  of  the  provisions  of  sections  3,  .4,  5,  6,  or  7 (and 
which  complaint  has  not  been  adjusted  satisfactorily  to  said  complainant  within  90 
I days  after  filing  his  complaint  with  the  United  States  Supervised  Live  Stock 
i Exchange  at  the  point  at  which  the  transaction  complained  of  took  place,  provided 
that  all  such  complaints  shall  be  so  filed  within  30  days  from  the  occurrence  of  the 
i transaction  complained  of)  or  of  an  order  of  the  Secretary  made  under  this  title,  may 
| at  any  time  within  2 years  after  the  cause  of  action  accrues,  apply  to  the  Secretary 
by  petition  which  shall  briefly  state  the  facts,  whereupon  the  complaint  thus  made 
I shall  be  forwarded  by  the  Secretary  to  the  defendant,  who  shall  be  called  upon  to 
satisfy  the  complaint,  or  to  answer  it  in  writing,  within  a reasonable  time  to  be 
I specified  by  the  Secretary.  If  the  defendant  within  the  time  specified  makes  rep- 
aration for  the  injury  alleged  to  be  done  he  shall  be  relieved  of  liability  to  the 
j complainant  only  for  the  particular  violation  thus  complained  of.  If  the  defendant 
i does  not  satisfy  the  complaint  within  the  time  specified,  or  there  appears  to  be  any 
reasonable  ground  for  investigating  the  complaint,  it  shall  be  the  duty  of  the  Secretary 
to  investigate  the  matters  complained  of. 

(b)  The  Secretary  at  the  request  of  the  live  stock  commissioner,  Board  of  Agri- 
j culture,  or  other  agency  of  a State  or  Territory,  having  jurisdiction  over  stockyards 
in  such  State  or  Territory,  shall  investigate  any  complaint  forwarded  by  such  agency 
I in  like  manner  and  with  rhe  same  authority  and  powers  as  in  the  case  of  a complaint 
i made  under  subdivision  (a). 

L (c)  The  Secretary  may  at  any  time  institute  an  inquiry  on  his  own  motion,  in  any 
case  and  as  to  any  matter  or  tiling  concerning  which  a complaint  is  authorized  to  be 
i made  to  or  before  the  Secretary,  by  any  provision  of  this  title,  or  concerning  which 
any  question  may  arise  under  any  of  the  provisions  of  this  title,  or  relating  to  the 
I enforcement  of  any  of  the  provisions  of  this  title.  The  Secretary  shall  have  the  same 
| power  and  authority  to  proceed  with  any  inquiry  instituted  upon  his  own  motion 
I as  though  he  had  been  appealed  to  by  petition,  including  the  power  to  make  and 
| enforce  any  order  or  orders  in  the  case"  or  relating  to  the  matter  or  thing  concerning 
which  the  inquiry  is  had,  except  orders  for  the  payment  of  money. 

(d)  No  comnlamt  shall  at  any  time  be  dismissed  because  of  the  absence  of  direct 
k damage  to  the  complainant. 

(e)  If  after  hearing  on  a complaint  the  Secretary  determines  that  the  complaintant 
is  entitled  to  an  award  of  damages,  the  Secretary  shall  make  an  order  directing  the 
defendant  to  pay  to  the  complainant  the  sum  to  which  he  is  entitled  on  or  before  a 
day  named. 

Sec.  13.  (a)  Whenever  the  Secretary  has  reason  to  believe  that  any  dealer  has 
violated  or  is  violating  any  provision  of  this  title,  he  shall  cause  a complaint  in  writ- 
ing, together  with  a brief  statement  of  the  facts  in  support  thereof,  to  be  served  upon 
; such  dealer,  specifying  the  alleged  violations,  and  requiring  him  to  answer  such  com- 
plaint at  a time  and  place  designated  therein,  at  least  30  days  after  the  service  of 
such  complaint;  and  thereupon  a full  hearing  shall  be  had,  at  which  time  and  place 
the  dealer  shall  be  afforded  a reasonable  opportunity  to  be  heard  in  person  or  by 
counsel  and  through  witnesses,  with  the  further  right  to  examine  all  evidence  in  the 
proceeding  and  to  cross-examine  witnesses,  under  such  regulations  as  the  Secretary 
may  prescribe.  Any  person  for  good  cause  shown  may  on  application  be  allowed 
by  the  Secreatry  to  intervene  in  such  proceeding  and  appear  in  person  or  by  counsel. 

(b)  If,  after  such  hearing,  the  Secretary  finds  that  the  dealer  has  violated  or  is  vio- 
lating any  provision  of  this  title,  he  shall  make  a report  in  writing  in  which  he  shall 
state  his  findings  as  to  the  facts,  and  shall  issue  and  cause  to  be  served  on  the  dealer 
an  order  requiring  such  dealer  to  cease  and  desist  from  continuing  such  violations. 
The  testimony  taken  at  the  hearings  shall  be  reduced  to  writing  and  filed  in  the 
records  of  the  Department  of  Agriculture. 

(c)  Until  a transcript  of  the  record  in  such  hearing  has  been  filed  in  a circuit  court 
of  appeals  of  the  United  States,  as  provided  in  section  205,  the  Secretary  at  any  time, 
upon  such  notice  and  in  such  manner  as  he  deems  proper,  but  only  after  reasonable 
opportunity  to  the  dealer  to  be  heard,  may  amend  or  set  aside  the  report  or  order,  in 
whole  or  in  part. 

(d)  Complaints,  orders,  and  other  processes  of  the  Secretary  under  this  section  may 
be  served  in  the  same  manner  as  provided  in  section  5 of  the  act  entitled  “An  act  to 
create  a Federal  Trade  Commission,  to  define  its  powers  and  duties,  and  for  other 
purposes,  ” approved  September  26,  1914. 

Sec.  14.  (a)  An  order  made  under  sections  13  and  16  hereof  shall  be  final  and 
conclusive  unless  within  30  days  after  service  the  dealer  appeals  to  the  circuit 
court  of  appeals  for  the  circuit  in  which  he  has  his  principal  place  of  business,  by  filing 
with  the  clerk  of  such  court  a written  petition  praying  that  the  Secretary’s  order  be 
set  aside  or  modified  in  the  manner  stated  in  the  petition,  together  with  a bond  in 


444 


MEAT  PACKER. 


such  sum  as  the  court  may  determine,  conditioned  that  such  dealer  will  pay  the 
costs  of  the  proceedings  if  the  court  so  directs. 

(b)  The  clerk  of  the  court  shall  immediately  cause  a copy  of  the  petition  to  be 
delivered  to  the  Secretary,  and  the  Secretary  shall  forthwith  prepare,  certify,  and 
file  in  the  court  a full  and  accurate  transcript  of  the  record  in  such  proceedings, 
including  the  complaint,  all  pleadings,  all  evidence  offered,  and  the  report  and 
order.  If  before  such  transcript  is  filed  the  Secretary  amends  or  sets  aside  his  report 
or  order  in  whole  or  in  part,  the  petitioner  may  amend  the  petition  within  such  time 
as  the  court  may  determine,  on  notice  to  the  Secretary. 

(c)  At  any  time  after  such  transcript  is  filed  the  court,  on  application  of  the  -Sec- 
retary, may  issue  a temporary  injunction  restraining  to  the  extent  it  deems  proper 
the  dealer  and  his  officers,  directors,  agents,  and  employees  from  violating  any  of  the 
provisions  of  the  order  pending  the  final  determination  of  the  appeal. 

(d)  The  evidence  offered  on  the  hearing,  duly  certified  and  filed  as  aforesaid  as  a 
part  of  the  record,  shall  be  considered  by  the  court  as  the  evidence  in  the  case.  The 
proceedings  in  such  cases  in  the  circuit  court  of  appeals  shall  be  made  a preferred 
cause  and  shall  be  expedited  in  every  way. 

(e)  The  court  shall  have  power,  upon  the  pleadings,  evidence,  and  proceedings 
set  forth  in  such  transcript,  to  enter  a decree  which  may  affirm,  modify,  or  set  aside 
the  order  of  the  Secretary,  but  the  findings  of  the  Secretary  as  to  the  facts,  if  supported 
by  the  weight  of  evidence,  shall  be  conclusive. 

(f)  If  the  court  determines  that  the  just  and  proper  disposition  of  the  case  required 
the  taking  of  additional  evidence,  the  court  shall  order  the  hearing  to  be  reopened  for 
the  taking  of  such  evidence,  in  such  manner  and  upon  such  terms  and  condition  as 
the  court  may  deem  proper.  The  Secretary  may  modify  his  findings  as  to  the  facts, 
or  make  new  findings,  by  reason  of  the  additional  evidence  so  taken,  and  he  shall 
file  such  modified  or  new  findings  and  his  recommendations,  if  any,  for  the  modi- 
fication or  setting  aside  of  his  order,  with  the  return  of  such  additional  evidence. 
Such  new  or  modified  findings  as  to  the  facts,-  if  supported  by  the  wieght  of  the  evi- 
dence, shall  be  conclusive. 

(g)  If  the  circuit  court  of  appeals  affirms  or  modifies  the  order  of  the  Secretary,  its 
decree  shall  operate  as  an  injunction  to  restrain  the  dealer  and  his  officers,  directors, 
agents,  and  employees  from  violating  the  provisions  of  such  order,  or  such  order  as 
modified. 

(h)  The  circuit  court  of  appeals  shall  have  exclusive  jurisdiction  to  review  and  to 
set  aside  or  modify  such  orders  of  the  Secretary,  and  the  decree  of  such  court  shall  be 
final  except  that  it  shall  be  subject  to  review  by  the  Supreme  Court  of  the  United 
States  upon  certiorari,  as  provided  in  section  240  of  the  Judicial  Code,  if  such  writ  is 
duly  applied  for  within  60  days  after  entry  of  the  decree.  The  issue  of  such  .writ 
shall  not  operate  as  a stay  of  the  decree  of  the  circuit  court  of  appeals  in  so  far  as  such 
decree  operates  as  an  injunction. 

(i)  For  the  purpose  of  this  title  the  term  “ circuit  court  of  appeals,”  in  case  the 
principal  place  of  business  of  the  dealer  is  in  the  District  of  Columbia,  means  the 
Court  of  Appeals  of  the  District  of  Columbia. 

Sec.  15.  (a)  Any  dealer,  or  any  officer,  director,  agent,  or  employee  of  a dealer  who 
knowingly  and  willfully  fails  to  obey  any  order  of  the  Secretary  issued  under  the  pro- 
visions of  section  13,  or  such  order  as  modified — 

(1)  After  the  expiration  of  the  time  allowed  for  filing  a petition  in  the  circuit  court 
of  appeals  to  set  aside  or  modify  such  order,  if  no  such  petition  has  been  filed  within 
such  time;  or 

(2)  After  the  expiration  of  the  time  allowed  for  applying  for  a writ  of  certiorari,  if 
such  order,  or  such  order  as  modified,  has  been  sustained  by  the  circuit  court  of 
appeals  and  no  such  writ  has  been  applied  for  within  such  time;  or 

(3)  After  such  order,  or  such  order  as  modified,  has  been  sustained  by  the  courts  as 
provided  in  section  205,  shall  on  conviction  be  fined  not  less  than  $100  nor  more  than 
$1,000,  or  imprisoned  for  not  less  than  three  months  nor  more  than  five  years,  or  both. 
Each  day  during  which  such  failure  continues  shall  be  deemed  a separate  offense. 

(b)  The  Secretary  shall  report  any  violation  of  this  section  to  the  Attorney  General 
of  the  United  States,  who  shall  cause  appropriate  proceedings  to  be  commenced  and 
prosecuted  in  the  proper  courts  of  the  United  States  without  delay. 

Sec.  1G.  Whenever  after  full  hearing  upon  a complaint  made  as  provided  in  section 
12,  or  after  full  hearing  under  an  order  for  investigation  and  hearing  made  by  the  Sec- 
retary on  his  own  initiative  either  in  extension  of  any  pending  complaint  or  without 
any  complaint  whatever,  but  in  substantial  conformity  with  the  procedure  as  specified 
in  section  13,  the  Secretary  is  of  the  opinion  that  any  rate,  charge,  regulation,  or 
practice  of  a stockyard  owner  or  market  agency,  for  or  in  connection  with  the  furnish- 
ing of  stockyard  services,  is  or  will  be  unjust,  unreasonable,  or  discriminatory,  the 
Secretary — 


MEAT  PACKER. 


445 


* ’ (a)  May  determine  and  prescribe  what  will  be  the  just  and  reasonable  rate  or  charge, 

:■  or  rates  or  charges,  to  be  thereafter  observed  in  such  cases,  or  the  maximum  or  mini- 
pium,  or  the  maximum  and  minimum,  to  be  charged,  and  what  regulation  or  practice 
is  or  will  be  just,  reasonable,  and  nondiscriminatory,  to  be  thereafter  followed;  and 

: (b)  May  make  an  order  that  such  owner  or  operator  (1)  shall  cease  and  desist  from 
•such  violation  to  the  extent  to  which  the  Secretary  finds  that  it  does  or  will  exist; 
c (2)  shall  not  thereafter  publish,  demand,  or  collect  any  rate  or  charge  for  the  furnishing 
of  stockyard  services  other  than  the  rate  of  charge  so  prescribed,  or  in  excess  of  the 
maximum  or  less  than  the  minimum  so  prescribed,  as  the  case  may  be;  arid  (3;  shall 
- conform  to  and  observe  the  regulation  or  practice  so  prefyribod . 

Sec.  17.  Whenever  in  any  investigation  under  the  provisions  of  this  title,  or  in  any 
■ investigation  instituted  by  petition  of  the  stockyard  owner  or  market  agency  or  dealer 
concerned,  which  petition  is  hereby  authorized  to  be  filed,  the  Secretary  after  full 
hearing  finds  that  any  rate,  charge,  regulation,  or  practice  of  any  stockyard  owner,  or 
market  agency,  or  any  practice  of  any  dealer,  for  or  inconnection  with  the  receiving, 
marketing,  feeding,  holding,  delivery,  shipment,  weighing,  or  handling,  notin  commerce 
or  liVe  stock,  causes  any  undue  or  unreasonable  advantage,  prejudice,  or  preference  as 
between  persons  or  localities  in  intrastate  commerce  in  live  stock  on  the  one  hand  and 
interstate  or  foreign  commerce  in  live  stock  on  the  other  hand,  or  any  undue,  unjust, 
i or  unreasonable  discrimination  against  interstate  or  foreign  commerce  in  live  stock, 
which  is  hereby  forbidden  and  declared  to  be  unlawful,  he  shall  prescribe  the  rate, 
charge,  regulation,  or  practice  thereafter  to  be  observed,  in  such  manner  as,  in  his 
judgment,  will  remove  such  advantage,  prejudice,  preference,  or  discrimination. 
Such  rates,  charges,  regulations,  or  practices  shall  be  observed  while  in  effect  by  the 
stockyard  owners  or  market  agencies  parties  to  such  proceeding  affected  thereby,  the 
law  of  any  State  or  the  decision  ok  order  of  any  State  authority  to  the  contrary  notwith- 
standing. 

Sec.  18.  (a)  It  shall  be  unlawful  for  any  stockyard  owner,  market  agency,  or  dealer 
to  engage  in  or  use  any  unfair,  unjustly  discriminatory,  or  deceptive  practice  or  device 
in  connection  with  the  receiving,  marketing,  feeding,  watering,  holding,  delivery, 
shipment,  weighing,  or  handling,  -in  commerce  at  a stockyard,  of  live  stock — 

(b)  Whenever  complaint  is  made  to  the  Secretary  by  any  person,  or  whenever 
the  Secretary  has  reason  to  believe,  that  any  stockyard  owner,  market  agency,  or 
•dealer  is  violating  the  provisions  of  subdivision  (a),  the  Secretary,  after  notice  and 
full  hearing  as  provided  in  section  13  and  subject  to  the  provisions  respecting  review 
hy  the  circuit  court  of  appeals  may  make  an  order  that  he  shall  cease  and  desist  from 
continuing  such  violation  to  the  extent  that  the  Secretary  finds  that  it  does  or  will 
exist. 

“Sec.  19.  Except  as  otherwise  provided  in  this  act  all  orders  of  the  Secretary  other 
than  orders  for  the  payment  of  money  shall  take  effect  within  such  reasonable  time, 
not  less  than  five  days,  as  is  prescribed  in  the  order,  and  shall  continue  in  force  until 
its  further  order,  or  for  a specified  period  of  time,  according  as  is  Interstate  Commerce 
Commission  and  the  immunity  of  witnesses  in  connection  therewith,  or  to  the  sus- 
pending or  restraining  the  enforcement,  operation,  or  execution  of,  or  the  setting 
aside,  in  whole  or  in  part,  the  orders  of  the  Interstate  Commerce  Commission,  are 
made  applicable  to  the  jurisdiction,  powers,  and  duties  of  the  Secretary  in  enforcing 
the  provisions  of  this  title,  and  to  any  person  subject  to  the  provisions  of  this  title, 
except  that  the  Secretary  shall  have  no  authority  to  prescribe  the  form  of  accounts, 
records,  and  memoranda  kept  by  such  dealer  unless  he  finds  that  the  accounts,  records, 
and  memoranda  do  not  fully  and  correctly  disclose  all  transactions  involved  in  his 
business,  including  the  true  ownership  of  such  business  by  stockholding  or  otherwise, 
and  in  such  case  only  to  the  extent  of  requiring  such  records  as  will  disclose  these  facts. 

Sec.  22.  Nothing  contained  in  this  act,  except  to  the  extent  as  otherwise  provided 
herein,  shall  be  construed— • 

(a)  To  prevent  or  interfere  with  the  enforcement  of,  or  the  procedure  under,  the 
provisions  of  the  act  entitled  an  act  to  protect  trade  and  commerce  against  unlawful 
restraints  and  monopolies,  approved  July  2,  1890,  the  act  entitled  an  act  to  supplement 
existing  laws  against  unlawful  restraints  and  monopolies,  and  for  other  purposes, 
approved  October  15,  1914,  the  Interstate  Commerce  act  as  amended,  the  act  entitled 
an  ar>t  to  create  a Federal  Trade  Commission,  to  define  its  powers  and  duties,  and  for 
other  purposes,  approved  September  26,  1914,  prescribed  in  the  order,  unless  such 
order  is  suspended  or  modified  or  set  aside  by  the  Secretary  or  is  suspended  or  set 
aside  by  a court  of  competent  jurisdiction,  provided  in  section  14. 

Sec.  20.  If  any  stockyard  owner,  market  agency,  or  dealer  fails  to  obey  any  order  of 
the  Secretary,  other  than  for  the  payment  of  money,  while  the  same  is  in  effect,  the 
Secretary,  or  any  party  injured  thereby,  or  the  United  States  by  its  Attorney  General, 
may  apply  to  the  District  court  in  which  such  person  has  his  principal  place  of  business 


446 


MEAT  PACKER. 


for  the  enforcement  of  such  order.  Such  suit  in  the  district  court  shall  proceed  in  all 
respects  like  other  civil  suits  for  damages,  except  the  findings  and  orders  oi 
the  Secretary  shall  be  pnma  facie  evidence  of  the  facts  therein  stated.  If  after  full 
hearing  the  court  determines  that  the  order  was  lawfully  made  and  duly  served 
and  that  such  person  is  m disobedience  of  the  same,  the  court  shall  enforce  obedience 
to  such  order  by  a writ  of  injunction  or  other  proper  process,  mandatory,  or  otherwise 
to  restrain  such  person,  his  officers,  agents,  or  representatives,  from  further  disobedience 
ot  such  order,  or  to  enjoin  upon  him  or  them  obedience  to  the  same. 

SEc,21.  For  the  purpose  of  securing  effective  enforcement  of  the  provisions  of  this 
title,  the  provisions  (including  penalties)  of  sections  12,  14,  16a,  17,  and  19,  and  of  the 
first  ten  paragraphs  of  Section  20,  of  the  interstate  commerce  act,  as  amended,  and 
ot  all  laws  relating  to  the  compelling  of  testimony  before  the  act  entitled  “An  act  to 
?xPor^  tradf>  and  for  ot.her  purposes,”  approved  April  10,  1918,  or  sections 
76  to  77,  inclusive,  of  the  act  entitled  “An  act  to  reduce  taxation,  to  provide  revenue 
tor  the  Government,  and  for  other  purposes,”  approved  August  27,  1894,  as  amended 
by  the  act  entitled  ‘ An  act  to  amend  sections  73  and  76  of  the  act  of  August  27,  1894 
entitled  ‘An  act  to  reduce  taxation,  to  provide  revenue  for  the  Government  and 
tor  other  purposes,’  approved  February  12,  1913,”  or 

(b)  To  alter,  modify,  or  repeal  such  acts  or  any  parts  thereof,  or 

(c)  To  prevent  or  interfere  with  any  investigation,  proceeding,  or  prosecution 
begun  and  pending  at  the  time  this  act  becomes  effective,  or 

(d)  To  relieve  any  person  from  obedience  to  any  consent  or  other  decree  heretofore 
entered  against  him  by  a court  of  competent  jurisdiction. 

Sec.  23.  If  any  provision  of  this  act  or  the  application  thereof  to  any  person  or  cir-. 
cumstances  is  held  invalid,  the  validity  of  the  remainder  of  the  act  and  of  the  applica- 
tion ot  such  provision  to  other  persons  and  circumstances  shall  not  be  affected  thereby. 
Sec.  24.  This  act  shall  take  effect  90  days  after  its  passage. 

Mr.  Lightfoot.  Of  course,  Mr.  Creigh  is  presenting  his  ideas  of! 
what  should  be  presented  in  these  bills,  and  I think  that  I can  illus- 
trate just  in  a word  the  point  that  he  is  making,  He  referred  to  a? 
complaint  being  filed  against  Wilson  & Co.  at  one  time.  They  speci- 
fied in  that  complaint  a transaction  that  we  were  supposed  to  answer. 
We  prepared  to  answer  that  transaction,  but  we  had  no  knowledge 
that  there  would  be  or  were  any  other  charges  in  connection  with 
that  transaction,  so  when  we  came  to  Washington  for  our  hearing  we  ! 
found  that  when  they  found  that  the  evidence  was  weak  on  this  ( 
point,  and  they  could  not  sustain  the  charge,  that  they  sent  all  of  { 
their  investigators  out  all  over  the  country  and  raked  it  with  a fine-  5 
tooth  comb  to  get  other  similar  transactions,  if  they  could,  in  order  J 
to  keep  from  falling  down  on  that  one,  and  when  we  came  into  the  j 
hearings  we  were  confronted  with  things  that  we  had  never  heard 
about,  we  were  confronted  with  things  of  which  we  had  no  knowledge, 
and  then  we  had  to  ask  for  an  extension  of  time  in  order  that  we 
might  prepare  to  meet  those  charges.  So  if  we  had  a brief  statement 
of  what  the  charges  were  in  advance,  or  had  the  privilege  of  asking 
for  them,  and  if  they  had  given  them  to  us  so  that  we  would  have 
had  notice  of  the  other  charges,  so  that  we  could  have  prepared  for 
the  charges,  we  would  have  been  in  a position  to  go  on  without  having 
all  this  difficulty.  And  the  whole  upshot  of  it  was  that  after  we  got 
all  of  the  charges  and  had  the  hearing  the  Federal  Trade  Commission 
dismissed  the  suit  in  its  entirety,  in  every  single  one  of  the  additional 
charges  they  brought. 

Now,  I think  that  that  is  what  Mr.  Creigh  had  in  mind,  that  if  you 
are  alleged  to  have  been  guilty  of  a violation,  and  they  file  a claim 
against  you,  you  should  be  entitled  to  know  what  the  charges  against 
you  were. 

Mr.  Purnell.  If  the  department  has  sufficient  facts  upon  which 
to  base  the  complaint,  there  ought  to  be  no  hesitancy  to  publish 
them  to  the  world. 


MEAT  PACKER. 


447 


Mr.  Lightfoot.  Yes;  and  not  wait  until  we  got  into  the  hearing 
before  the  commission,  with  all  of  the  witnesses,  and  then  spring  some- 
thing upon  us  that  we  didn’t  know  anything  about. 

Mr.  Purnell.  If  they  did  not  have  evidence  strong  enough  to 
substantiate  the  charge  they  should  not  file  a complaint. 

Mr.  Lightfoot.  No;  of  course,  if  they  haven’t  evidence  enough, 
they  shouldn’t  file  a complaint.  I am  not  criticizing  that;  they 
thought  they  probably  had  sufficient  evidence.  But  we  didn’t  have 
any  knowledge  of  it  until  we  were  actually  in  the  trial,  and  then  we 
had  to  go  out  and  hunt  it  up  again  and  investigate  the  facts.  That 
is  the  thing  that  I am  criticizing,  the  fact  that  we  were  not  furnished 
with  this  information  until  we  actually  came  there  for  trial.  Now, 
if  we  had  the  privilege  of  asking,  “What  is  your  charge?  Give  us  a 
brief  statement  of  what  the  complaint  is  about,”  then  we  can  pre- 
pare ourselves,  and,  as  Mr.  Creigh  suggested,  it  might  not  be  neces- 
sary to  have  a hearing  at  all.  But  then  there  is  another  thing.  It 
might  be  that  the  complaint  was  about  something  that  we  had  no 
knowledge  of  at  all,  that  we  had  never  heard  of,  and  if  we  did  not 
have  a statement  of  the  facts  we  would  not  be  in  a position  to  investi- 
gate and  know  what  it  was  about.  It  might  have  been  in  connection 
with  a transaction  by  somebody  a thousand  miles  away;  somebody 
might  have  done  something  that  we  didn’t  know  anything  at  all 
about,  but  the  Federal  Trade  Commission  might  have  heard  about 
it,  and  the  first  thing  we  knew  about  it  was  when  this  complaint  was 
made.  Now,  we  want  to  know  what  it  is  about,  and  let  us  get  a 
brief  statement  of  the  evidence,  and  if  there  is  more  than  one  charge 
in  the  complaint  we  should  be  advised  of  it,  so  we  would  be  prepared 
at  the  trial. 

Mr.  Voigt.  Why  wouldn’t  this  meet  your  objection;  suppose  you 
add  on  at  the  end  of  line  15,  page  5,  the  words,  “with  a reasonable 
degree  of  particularity”  ? 

Mr.  Creigh.  That  covers  the  point.  My  language  was,  “together 
with  a brief  statement  of  facts.”  All  we  want  is  the  idea  of  having 
some  definiteness. 

Mr.  Kincheloe.  I understand  your  contention  is  that  you  not 
only  want  the  statement  of  facts  but  you  would  like  to  be  put  into 
possession  of  the  facts  upon  which  the  complaint  is  based. 

Mr.  Creigh.  That  is  at  the  time  of  the  trial  but  not  as  a part  of  the 
complaint.  If  it  is  at  the  time  of  the  trial,  I certainly  want  to,  but 
not  as  a part  of  the  complaint. 

Mr.  Kincheloe.  No. 

Mr.  Creigh.  Now,  in  that  same  connection,  Mr.  Voigt,  don’t  you 
think  this  section  “b”  should  be  changed?  Look  at  that. 

“If,  after  such  hearing,  the  Secretary  finds  that  the  packer  has 
violated  or  is  violating” — what  ? “Any  provision  of  this  title.” 

Why,  if  it  should  state  that  he  is  violating  the  act  as  charged  in  the 
complaint,  something  like  that,  then  we  would  really  have  a chance. 

The  committee  has  been  very  courteous,  but  there  is  one  other 
general  line  of  information  that  I would  like  to  put  in.  My  chief  fear 
about  the  bill  arose  entirely  out  of  the  indefiniteness  of  the  language 
as  to  what  is  a fair  practice  or  what  is  not,  or  what  is  a discrimination 
or  what  is  not.  In  the  Federal  Trade  Commission  act  the  words  are: 
“ Unfair  methods  of  competition.”  Something  more  than  a year  ago 
some  association  made  a tabulation  of  some  fifty-odd  things,  I be- 


448 


MEAT  PACKER. 


lieve — well,  the  number  was  61  at  that  time — that  had  been  held  to 
be  unfair  methods  of  competition  already.  Now,  I think  any  one  of 
you  would  be  quite  astonished  to  see  the  width  of  jurisdiction  that 
has  been  assumed.  For  instance,  here  is  a discrimination  in  prices 
between  purchasers  or  localities. 

Now,  this  idea  of  discriminating  in  prices  is  quite  a thing.  Have 
we  got  to  make  the  same  price  to  all  our  trade,  or  buy  live  stock  at 
the  same  price  at  all  points?  Or  what  will  unfair  trade  practices 
mean  ? I say  there  is  every  species  of  regulation  within  that.  I will 
show  you  another  one  under  the  unfair  methods  of  competition: 
Even  enticing  the  employees  of  competitors.  Well,  now,  that  is  a 
pretty  big  proposition,  as  to  whether  if  Cudahy  wants  to  hire  some- 
body’s man  and  pay  him  an  increased  salary,  it  is  an  unfair  method  of 
competition  to  try  to  get  him.  I don’t  know.  It  is  all,  however, 
within  section  5 of  the  Federal  Trade  Commission  act  now,  so  I want 
to  leave  with  you,  just  as  a matter  of  interest  for  the  committee,  and 
as  an  illustration  of,  I think,  the  undreamed  of  stretching  of  the  words 
‘‘  unfair  methods  of  competition,”  this  little  tabulation  beginning  on 
page  24  of  the  pamphlet  “Notes  on  S.  3944.  Federal  Live  Stock 
Commission  Act,”  which  I will  leave  with  the  committee  to  be  placed 
in  the  record. 

The  Chairman.  Without  objection  it  may  be  placed  in  the  record. 

(Appendix  A to  notes  on  S.  3944,  Federal  Live  Stock  Commission 
Act,  presented  by  Mr.  Creigh  for  the  record,  is  here  printed  in  full, 
as  follows :) 

Appendix  A. 

UNFAIR  COMPETITION  AS  CONSIDERED  BY  THE  FEDERAL  TRADE  COMMISSION. 

We  submit  herewith  a list,  compiled  by  the  American  Specialty  Manufacturers,  of 
certain  practices  of  which  the  commission  has  heretofore  complained  upon  the  ground 
of  unfair  competition: 

1.  Agreements  to  give  dealers  special  commissions  or  rebates,  provided  they  deal 
in  the  seller’s  goods  exclusively. 

2.  Giving  cumulative  discounts  or  rebates  to  dealers  whereby  they  receive  at  the 
end  of  a fixed  period  certain  rebates  or  discounts  based  upon  the  aggregate  purchases 
during  that  period. 

3.  Selling  to  such  dealers  only  who  will  refrain  or  agree  to  refrain  from  dealing  in 
competitor’s  goods. 

4.  Effecting  contracts  for  advertising,  subject  to  cancellation  if  competing  goods 
are  advertised  in  the  same  medium. 

5.  Guaranteeing  customers  against  decline  in  price  of  goods  purchased,  and  not 
resold  by  such  customers  at  the  time  of  any  subsequent  decline  in  the  prevailing 
market  price  of  such  goods. 

6.  Effecting  long-term  contracts  with  customers. 

7.  Effecting  exclusive  contracts  to  manufacture  or  sell,  e.  g.,  contracts  to  manu- 
facture exclusively  for  respondent,  not  to  sell  to  competitors,  not  to  deal  in  any  other 
similar  products  except  with  the  permission  of  respondent,  not  to  sell  nonmembers 
of  a dealers’  organization. 

8.  Agreements  with  dealers  not  to  sell  competing  goods  of  a similar  color  or  sub- 
stitutes for  or  imitations  of  respondent’s  goods. 

9.  Failure  to  perform  numerous  contracts  to  sell  because  of  an  advance  in  the  market 
price  of  the  product  sold  and  the  surreptitious  marketing  of  such  product  through 
another  concern  at  the  higher  prices. 

10.  Effecting  resale  price  maintenance  by  contract,  agreement  or  refusal  to  sell. 

11.  Purchasing  one’s  own  products  from  dealers  selling  such  products  at  less  than 
the  fixed  and  standard  resale  prices. 

12.  Inducing  and  causing  contracts  affecting  competitors  to  be  broken,  rescinded 
or  delayed. 

13.  Claiming,  exercising,  and  maintaining  a monopoly  in  the  sale  of  products. 

14.  Procuring  others  to  make  bogus  and  spurious  requests  for  estimates  from  com- 
petitors. 


MEAT  PACKER. 


449 


15.  Inducing,  through  actual  or  threatened  withdrawal  of  patronage,  the  discon- 
tinuance of  the  furnishing  of  supplies  to  a competitor. 

16.  Effecting  commercial  bribery  through  the  corrupt  giving  by  a seller  to  the  em- 
ployee or  agent  of  a customer  of  any  money  or  other  thing  of  value  or  entertainment 
with  the  purpose  of  influencing  the  recipient  in  relation  to  the  business  of  his  em- 
ployer or  principal. 

17.  Issuing  lottery  premium  coupons. 

18.  Willfully  damaging  or  tampering  with  competitor’s  property. 

19.  Discriminating  in  prices  between  purchasers  or  localities. 

20.  Espionage,  as  through  employing  secret  agents  to  spy  upon  competitors’  business, 
surreptitiously  entering  the  factory  of  a competitor  to  procure  drawings  of  machinery, 
procuring. trade  secrets,  bribing  railroad  employees  to  obtain  information  as  to  com* 
petitors’  shipments,  trailing  delivery  and  sales  agents  of  competitors,  requesting 
employees  and  dealers  to  spy  upon  other  dealers. 

21 . Enticing  employees  of  competitors. 

22.  Instituting  unwarranted  suits  against  competitors. 

23.  Interfering  with  a competitor’s  business  by  purchasing  from  dealers  the  goods  of 
such  competitor  and  submitting  one’s  own,  and  by  following  salesmen  of  a competitor 
to  hinder  and  embarrass  them  in  the  performance  of  their  duties. 

24.  Threatening  to  sue  a competitor  for  the  purpose  of  intimidation. 

25.  Threatening  to  force  competitors  out  of  business  unless  they  refrain  from  selling 
in  certain  territories. 

26.  Intimidating,  threatening,  boycotting,  molesting,  or  obstructing  of  competitors 
generally. 

27.  Dividing  of  territory  and  limiting  of  selling  area  by  competitors. 

28.  Threatening  to  cut  off  dealers’  supplies  unless  purchased  from  respondent. 

29.  Refusing  to  sell  unless  dealers  will  purchase  other  supplies,  unless  dealers  will 
agree  not  to  sell  the  products  of  a competitor,  unless  dealers  will  agree  to  sell  at  stand- 
ard resale  prices  fixed  by  the  seller. 

30.  Selling  or  offering  to  sell  below  cost  or  at  less  than  a fair  profit. 

31.  Selling  at  less  than  cost  upon  the  condition  that  the  customer  will  simultane- 
ously purchase  other  merchandise  upon  which  a profit  is  made  or  selling  certain  prod- 
ucts at  a loss  and  recouping  on  other*. 

32.  Selling  food  unfit  for  human  consumption. 

33.  Simulating  the  trade  name,  trade-mark,  cartons,  slogans,  advertising  matter 
or  appearance  of  the  product  of  a competitor. 

34.  Concealing  interest  in  other  concerns. 

35.  Maintenance  of  bogus  independence  and  cutting  of  prices  through  such  bogus 
independence. 

36.  Agreements  whereby  equipment  necessary  to  handling  certain  products  is 
loaned  on  condition  it  shall  be  used  exclusively  in  connection  with  respondent’s 
products. 

37.  Selling  machines  under  license  agreements  whereby  purchasers  may  not  use 
therewith  the  supplies  of  competitors,  and  may  not  use  the  seller’s  supplies  either  on 
competitor’s  machine  or  with  the  supplies  of  competitors. 

38.  Entering  into  an  agreement,  understanding,  or  pool  by  competitors  to  maintain 
prices  or  to  allot  business. 

39.  Locality  price  cutting. 

40.  Threatening  to  sell  and  selling  direct  to  consumers  in  order  to  compel  retailers 
to  handle  the  seller’s  goods  exclusively. 

41.  Purchasing  entire  output  of  raw  material. 

42.  Infringement  on  patents,  trade-marks,  and  copyrights  and  prosecutions  for 
alleged  infringement. 

43.  Making  up  cost  sheets  in  reckless  disregard  of  true  costs. 

44.  Impairment  of  competitive  power  of  other  concerns  through  stock  control. 

45.  Price  fixing  through  contracts,  associations,  and  combinations. 

46.  Effecting  a restraint  of  trade  through  contract,  combination,  or  conspiracy. 

47.  Organizing  of  trust  to  increase  prices. 

48.  Agreements  between  competitors  to  limit  output. 

49.  False  and  misleading  advertisement. 

50.  Misbranding. 

51.  Misrepresentations  and  false  statements,  either  about  one’s  own  or  a com  • 
petitor  ’s  merchandise  or  business. 

52.  Defamation,  libel,  slander,  disparagement  of  competitor-s  goods  or  business. 

53.  Passing  off  goods  as  of  other  manufacture. 

54.  Misuse  of  letter  from  commission  and  disobedience  of  order  by  commission. 

46985 — 21 29 


450 


MEAT  PACKER. 


55.  Agreements  between  manufacturers,  members  of  an  association,  and  laborers 
whereby  the  latter  do  not  work  for  nonmembers  or  for  manufacturers  not  maintain- 
ing standard  prices. 

56.  Appointment  by  a wholesaler'^  association  of  committees  to  confer  with  manu- 
facturers to  adopt  certain  sales  methods. 

57.  Compelling  members  of  an  association  against  their  will  to  maintain  standard 
prices  by  fines  and  withdrawals  of  labor. 

58.  Publishing  of  blacklists  by  an  association. 

59.  Inducing  organizations  to  influence  their  members  not  to  sell  to  competitors. 

60.  Inducing  and  compelling  manufacturers,  through  an  association,  not  to  recog- 
nize certain  dealers  as  legitimate  jobbers,  entitled  to  buy  at  jobbers-*  prices. 

61.  Combination  of  buyers  to  force  down  purchases  by  refusal  to  purchase. 

Mr.  Kincheloe.  Under  that  the  packers  could  not  change  lawyers 
that  were  already  in  the  employ  of  another  ? 

Mr.  Creigh.  Well,  I don’t  know,  sir,  as  to  whether  that  would 
be  held  to  be  an  unfair  method  of  competition. 

Mr.  Aswell.  Suppose  Wilson  offered  you  a larger  salary,  would 
that  be  unfair  ? 

Mr.  Creigh.  Well,  I don’t  know  whether  the  Federal  Trade 
Commission  would  say  that  Wilson  was  unfair  in  doing  that,  or 
whether  it  would  say  that  I was  unfair  if  I had  accepted  it. 

The  Chairman.  Is  that  all,  Mr.  Creigh  ? 

Mr.  Creigh.  That  is  all. 

The  Chairman.  Are  there  any  other  questions  ? ; 

Mr.  Voigt.  I want  to  ask  Mr.  Creigh  a few  questions  about  this  so-  J 
called  “ Black  Book.” 

Mr.  Creigh.  The  “ Black  Book,”  yes,  sir. 

Mr.  Voigt.  I started  to  ask  you  about  that  last  night,  and  we  J 
agreed  to  postpone  that  matter  until  you  made  your  statement. 

Mr.  Creigh.  Yes. 

Mr.  Voigt.  And  I should  like  to  take  that  up  now. 

Mr.  McLaughlin  of  Nebraka.  After  you  get  through,  Mr.  Voigt,  : 
I have  one  question  that  I want  to  ask  Mr.  Creigh  in  order  to  clear  up  ; 
a matter. 

Mr.  Voigt.  Have  you  the  “Black  Book”  before  you?  \ 

Mr.  Creigh.  What  volume  is  that  in  ? I 

Mr.  Voigt.  Part  II,  page  213. 

Mr.  Creigh.  Yes,  I have  it. 

Mr.  Voigt.  This  is  bearing  on  the  question  of  whether  there  is  any 
agreement  among  the  packers  for  a division  of  purchases  or  sales. 

It  appears  from  this  page,  that  the  so-called  “Black  Book”  was  a 
memorandum  in  the  handwriting  of  G.  F.  Sulzberger,  at  that  time  a 
member  of  Sulzberger  & Sons  Co.  It  also  appears  that  in  this 
memorandum  he  used  fictitious  names,  but  there  is  a key  to  these 
fictitious  names  given  on  page  213.  And  I am  just  going  to  read  some- 
thing to  you  out  of  the  “Black  Book”  and  substitute  the  right  name 
for  the  fictitious  name. 

Here  is  a memorandum  made  by  Mr.  Sulzberger  of  a meeting  with 
J.  O.  Armour  at  Armour’s  office,  on  January  29,  1913,  at  3.15  p.  m. 

I am  quoting  from  this  memorandum.  [Reading:] 

Armour  seemed  very  discouraged  with  the  general  situation  and  prospects.  I 
explained  this  was  due,  a good  deal,  to  his  own  foolish  tactics  in  New  York;  that  the 
situation  there  had  been  completely  demoralized  by  his  actions  and  that  this  was  a 
very  sensitive  situation.  He  admitted  that  he  thought  they  had  a made  a mistake 
there,  but  that  the  rest  of  the  situation  did  not  make  him  anxious  to  change  his  attitude. 

I explained  to  him  that  he  was  injuring  us  more  than  any  one  else  there,  as  we  had 
larger  proportionate  interests.  He  claimed  that  this  was  not  so,  that  Swift  had  larger 


MEAT  PACKER. 


451 


interests,  but  I explained  to  him  that  proportionately  this  was  not  the  case.  He  said 
he  had  no  intent  to  work  against  us,  and  said  that  he  would  arrange  now  to  do  the 
following:  Reduce  N.  Y.  10  per  cent  this  week.  Ten  per  cent  next  week. 

Now,  do  you  claim  that  that  language  does  not  show  a combination 
among  the  packers  ? 

Mr.  Creigh.  Why,  of  course,  I know  nothing  about  these  cir- 
cumstances here,  and  referring  to  the  “ black  book,”  you  will  find 
that  there  is  absolutely  no  mention  of  Cudahy  in  it  at  any  time. 
But  I will  go  ahead  and  answer  the  question. 

Mr.  Voigt.  Well,  let  us  just  keep  it  upon  these  two  packers,  then: 
Sulzberger,  who  was  later  succeeded  by  Wilson,  and  Mr.  Armour. 

Mr.  Creigh.  All  right.  Now,  the  whole  theory  of  the  five  or 
seven  volumes  of  the  Federal  Trade  Commission  report,  as  I read 
them — possibly  from  the  Cudahy  standpoint — is  that  for  thirty-odd 
years  there  has  been  a combination  between  the  Big  Five  continuously 
operating.  Is  that  right?  That  is  the  charge? 

Mr.  Voigt.  Well,  that  is  one  of  the  theories. 

Mr.  Creigh.  Well  now,  that  report  of  the  Federal  Trade  Com- 
mission— 

Mr.  Voigt  (interposing).  Just  let  me  say  this,  that  I think  if 
this  committee  was  satisfied  that  there  was  a combination  existing 
on  January  29,  1913,  they  might  conclude  from  that  that  it  had 
existed  at  least  some  time  before  that,  and  possibly  for  some  time 
after  that. 

Mr.  Creigh.  But  my  point  is,  Mr.  Voigt,  that  if  there  is  this  fixed 
percentage  combination  existing,  as  charged,  on  January  29,  1913, 
under  which  Sulzberger  and  Armour  had  had  an  agreed  percentage 
in  distribution  of  all  the  cattle  and  everything  else,  how  could  any 
such  a situation  as  is  noted  here  exist  ? Apparently  they  are  talking 
of  making  an  agreement  down  here. 

Mr.  Voigt.  Now  let  us  assume  that  there  wasn’t  any  agreement 
among  the  five  at  all. 

Mr.  Creigh.  Yes. 

Mr.  Voigt.  Then  will  you  please  explain  whether  this  particular 
language  would  indicate  that  there  was  an  agreement  between  these 
two  gentlemen  ? 

Mr.  Creigh.  Between  Armour  and  Sulzberger? 

Mr.  Voigt.  Between  Armour  and  Sulzberger. 

Mr.  Creigh.  Well  now,  if  there  was,  it  depends  then  on  this  lan- 
guage as  to  what  it  meant: 

He  said  be  had  no  intent  to  work  against  us  and  said  he  would  arrange  now  to  do 
the  following:  Reduce  New  York  10  per  cent  this  week;  10  per  cent  next  week. 

Have  you  any  idea  what  that  means  practically  in  the  business? 
I don’t. 

Mr.  Voigt.  Well,  it  doesn’t  make  much  difference  what  it  means. 
It  had  some  relation  to  the  business  of  these  two  packers.  They  had 
a private  meeting  and  they  made  some  agreement  respecting  their 
business  whereby  they  both  agreed  upon  an  unlawful  transaction. 
Now,  it  makes  no  difference  whether  Mr.  Armour  agreed  to  reduce 
New  York  10  per  cent  in  purchases  or  in  sales — that  would  be  a 
violation  of  the  Sherman  law. 

Mr.  Creigh.  Why,  that  certainly  does  not  follow  from  the  language 
here,  if  I may  put  it  back  to  you  that  strong. 


452 


MEAT  PACKFR. 


Mr.  Voigt.  You  mean  it  doesn’t  follow  that  it  referred  to 

Mr.  Creigh.  No;  that  it  would  violate  the  Sherman  law.  I don’t 
see  any  violation  of  the  Sherman  law  in  that  language.  Of  course, 

I don’t  know  what  the  language  means. 

Mr.  Voigt.  Well  now,  isn’t  it  fair  to  assume  from  this  language: 
“He  said  he  had  no  intent  to  work  against  us”  ? 

Mr.  Creigh.  Well,  what  does  that  mean? 

Mr.  Voigt.  That  meant  that  he  had  no  intent  to  work  to  antag- 
onize his  business  interests. 

Mr.  Creigh.  Why,  I would  read  it  the  other  way — that  apparently 
somebody  had  been  shipping  too  much  into  the  New  York  market, 
and  probably  trying  to  put  somebody  else  out  of  business.  But  I 
don’t  think  that  is  fair  competition  myself. 

Mr.  Voigt.  You  don’t  think  it  means  that  ? If  one  man  in  business 
says  to  another:  “I  have  no  intention  to  work  against  you,”  doesn’t 
that  mean,  “I  have  no  intention  to  do  you  any  harm”  ? 

Mr.  Creigh.  Well,  let  us  put  it  the  other  way:  Suppose  he  did 
have  the  intention  to  do  some  harm.  That  is  a violation  of  law, 
isn’t  it? 

Mr.  Voigt.  Why,  it  might  be  and  it  might  not  be. 

Mr.  Creigh.  Why,  it  certainly  is  a violation  of  the  Clayton  Act 
to  send  stuff  into  a man’s  general  territory  and  sell  it  so  low  that  ; 
you  put  him  out  of  business. 

Mr.  Voigt.  Now,  look  here:  “He  said  he  had  no  intent  to  work  , 
against  us,  and  said  that  he  would  arrange  now  to  do  the  following : i 
Reduce  N.  Y.  10  per  cent  this  week.  Ten  per  cent  next  week.” 

Mr.  Creigh.  Yes. 

Mr.  Voigt.  Well,  now,  doesn’t  that  show  that  these  two  men 
representing  the  two  packing  concerns,  were  making  some  under-  ; 
handed  transaction  for  the  purpose  of  influencing  business  in  their  line  : 
in  New  York? 

Mr.  Creigh.  Well,  of  course  when  you  say  “underhanded”  I ! 
don’t  quite  get  the  suspicion  of  their  being  underhanded  here. 

Mr.  Voigt.  Well,  let  us  use  the  word  “secret.” 

Mr.  Creigh.  Let  me  put  it  the  other  way,  if  you  please. 

Mr.  Voigt.  Let  us  use  the  word  “secret.” 

Mr.  Creigh.  Well,  what  is  the  anathema  of  “secret”?  I may  be 
selling  a man  to-day  on  the  New  York  market,  and  Swift  may  be 
selling  somebody  else.  I don’t  know  their  business,  therefore  it  is 
secret.  Now,  the  charge  in  the  Federal  Trade  Commission  report  is 
that  far  from  being  secret  we  know  too  much  about  the  business  of 
the  other  fellow. 

Mr.  Voigt.  Don’t  you  think  that  this  language  refers  to  the 
business  of  these  two  concerns  ? 

Mr.  Creigh.  Why,  I should  think  from  this — although  I say  I 
don’t  know  a thing  about  it — I should  think  from  this  that  Armour 
had  been  shipping  so  much  to  the  New  York  market  there  that  he  had 
demoralized  the  market,  and  was  hurting  Sulzberger  by  having 
demoralized  the  market.  He  also  hurt  himself.  There  was  a glut 
in  the  market,  in  other  words,  there,  which  is  the  very  thing  explained 
by  Gen.  Lightfoot  yesterday  as  being  within  the  contemplation  of  the 
Supreme  Court  of  the  United  States  in  the  packers’  case  as  being 
lawful. 

Mr.  Voigt.  Well,  let  us  get  at  it  this  way:  Then  does  it  mean  that 
Sulzberger  felt  that  the  competition  of  Armour  was  too  strong  for 


MEAT  PACKER. 


453 


him  in  New  York,  and  upon  his  making  complaint  to  Armour,  Mr. 
Armour  agreed  to  reduce  his  own  shipments  from  10  to  20  per  cent? 

Mr.  Creigh.  Well,  of  course,  we  are  both  supposing  on  what  it 
means.  Now,  as  to  whether  the  competition  of  Armour  was  unfair 
to  Sulzberger,  I should  imagine  that  Sulzberger  was  saying  to  Armour, 
1 1 Why,  you  are  shipping  so  much  in  here  that  you  are  making  a glut 
in  the  market,  and  you  are  killing  us  off,  even  yourself.”  It  says  in 
the  print  here:  “His  own  foolish  tactics  in  New  York,  that  the  situa- 
tion there  had  been  completely  demoralized  by  his  actions,  and  that 
this  was  a very  sensitive  situation.”  It  says,  that  he  “seemed  very 
discouraged  with  the  general  situation.” 

Mr.  Voigt.  Well,  then,  nevertheless,  this  does  indicate  that  Mr. 
Armour,  at  the  solicitation  of  Mr.  Sulzberger,  agreed  to  reduce 
shipments  to  New  York,  in  your  judgment? 

Mr.  Creigh.  Well,  again  I am  guessing.  It  says,  “reduce  New 
York  10  per  cent.”  I don’t  know  whether  that  would  be  price  or 
shipment,  myself,  but  I should  imagine  it  is  shipment. 

Mr.  Voigt.  Now  let  us  take  the  next  paragraph: 

He  gave  me  the  following  figures  on  which  he  commented  the  showing  on  hogs; 
I explained  to  him  that  nothing  had  been  taken  into  consideration  for  “0,”  and  that 
this  should  have  been.  This  seemed  to  relieve  his  mind.  I explained  to  him  what 
I proposed,  personally,  doing,  without  going  into  any  detail,  nor  did  he  show  any 
interest  to  raise  any  inquiry  as  to  any  of  the  detail. 

Now,  does  that  mean  to  you  that  these  men  had  been  talking  over 
purchases  or  sales  of  the  various  packers  ? 

Mr.  Creigh.  Well,  let  us  see  if  we  can  find  out  what “ the  following 
figures”  are.  There  is  a table  on  the  next  page. 

Mr.  Voigt.  The  table  referred  to,  found  on  the  next  page,  shows 
the  total  live-stock  purchases  for  four  weeks  ending  January  25,  1913, 
by  the  Big  Five.  Evidently  those  were  the  figures  discussed,  is  that 
right  ? 

Mr.  Creigh.  Well,  I should  say  that  those  are— I would  imagine 
that  those  are  the  figures  discussed ; yes,  sir. 

Mr.  Voigt.  Yes.  Does  that  strike  you  as  though  there  was  some 
combination  between  those  men  ? 

# Mr.  Creigh.  Why,  not  in  the  slightest.  You  could  go  into  our 
office  in  Chicago — of  course  this  is  back  to  1913 — you  could  go  into 
our  office  and  we  can  assemble  those  figures  every  week,  and  we  do. 
We  would  be  chumps  if  we  didn’t. 

Mr.  Voigt.  I understand  that  you  assemble  those  figures  ? 

Mr.  Creigh.  Why,  certainly. 

Mr.  Voigt.  But  is  it  customary  for  packers  to  call  on  each  other 
and  discuss  these  figures  ? 

Mr.  Creigh.  Well,  now,  all  of  that  depends  upon  what  you  mean 
by  “customary,”  as  a matter  of  from  day  to  day,  why  no,  certainly 

not. 

Mr.  Voigt.  But  they  do — it  is  nothing  unusual  then  for  them  to  get 
together  and  discuss  these  figures  of  purchases  ? 

Mr.  Creigh.  Well,  now,  when  you  say  “unusual  to  get  together,” 
I should  say  it  was  quite  unusual  that  they  should  get  together.  But 
apparently  Mr.  Sulzberger  here,  or  Mr.  Armour,  has  some  special  com- 
ment on  a certain  situation,  undisclosed  here,  as  between  themselves. 
Certainly  there  weren’t  five  packers  in  on  that  conference. 


454 


MEAT  PACKER. 


Mr.  Voigt.  No;  I don’t  think  so.  It  does  disclose,  does  it  not,  that  j 
Sulzberger  and  Armour  had  a confidential  visit  in  regard  to  the  figures 
showing  the  purchases  the  Big  Five  packers  ? 

Mr.  Creigh.  Well,  I should  say  that  one  or  the  other  evidently 
had  a complaint  to  make  that  some  fellow  was  hurting  him  in  some 
way,  but  there  certainly  is  nothing  to  indicate  any  agreement  in  all 
this. 

I am  very  much  interested  in  seeing  the  Cudahy’s  percentages  are 
so  far  from  the  agreed  percentage  here. 

Mr.  Purnell.  You  mean  the  alleged  agreed  percentages. 

Mr.  Creigh.  Why,  of  course,  that  is  what  I mean. 

Mr.  Voigt.  Do  you  attach  any  significance  to  the  fact  that  while 
these  figures  that  they  were  discussing  were  for  1913,  that  immediately 
opposite  these  1913  figures  were  given  percentage  figures  for  1910? 

Mr.  Creigh.  Well,  it  is  perfectly  obvious  that  somebody  was 
checking  up  either  the  decline  or  the  increase  of  his  business. 

Mr.  Voigt.  Now,  will  you  refer  to  page  216  of  the  “ Black  Book”? 
You  will  notice  there  a heading:  “My  talk  with  Klee  at  his  office, 
April  21,  1914.” 

According  to  the  key,  “Klee”  means  Morris.  Why  do  you  suppose  ■ 
that  the  man  who  kept  this  memorandum  used  these  fictitious  names  ? 

Mr.  Creigh.  Oh,  well,  why— why  do  I suppose  ? I haven’t  any 
supposition  about  it. 

Mr.  Voigt.  You  haven’t  any  supposition? 

Mr.  Creigh.  Why,  no.  , 

Mr.  Voigt.  You  can  not  think  of  any  reason  why  he  used  fic-  ?! 
titious  names  ? s 

Mr.  Creigh.  I could  think  of  a dozen. 

Mr.  Voigt.  Well,  what  is  the  best  one  that  you  can  think  of? 

Mr.  Creigh.  Oh,  well,  now,  let  us  talk  something  with  reference  to  ’ 
the  legislation,  if  you  please. 

Mr.  Voigt.  Well,  I think  this  has  a bearing  on  the  inquiry.  I am  j 
not  asking  you  this  question  out  of  idle  curiosity.  Well,  I will  ask  j 
you  this  question:  Was  it  for  the  purpose  of  concealing  the  actual  ; 
people  that  were  discussed  in  this  “Black  Book”? 

Mr.  Creigh.  Why,  I haven’t  the  slightest  idea,  sir.  . > 

Mr.  Voigt.  You  have  no  idea  why  he  used  fictitious  names  ? 

Mr.  Creigh.  It  would  seem  to  me  that  here  is  a record  that  gets  out 
some  way — I don’t  know  a thing  about  it.  My  chief  interest  in  it  is 
to  find  that  Cudahy  is  not  mentioned  in  there  at  all.  I think  that  is 
good  evidence  that  there  isn’t  a conspiracy  of  five  packers. 

Mr.  Lightfoot.  Mr.  Creigh,  on  that  point  I think  it  might  be  inter- 
esting to  state  that  while  all  this  matter  here  was  a long  time  ago,  and 
long  before  I came  into  the  industry,  from  the  best  information  that  I 
can  get  about  it,  Mr.  Sulzberger,  who  was  a very  young  man  and  not 
in  very  robust  health,  had  the  peculiarity,  the  idosyncrasy,  you  might 
say,  of  putting  down  in  some  kind  of  form  or  memorandum  any  con- 
versation which  he  had  with  any  person  about  any  matter  of  business 
of  any  kind.  And  if  you  went  into  his  office  and  had  a conference 
with  him  about  anything  of  importance  affecting  his  business,  he 
would  after  you  left  get  this  memorandum  book  and  write  out  his 
recollections  or  his  ideas  of  the  conference.  I don’t  know  whether  he 
would  do  it  immediately  or  not,  but  at  some  time  he  would.  He  was 
like  a person  who  keeps  a diary  of  everything  that  they  do  every  day. 

Mr.  Voigt.  Yes:  this  is  a sort  of  a diary. 


MEAT  PACKER. 


455 


Mr.  Ltghtfoot.  Yes.  But  I want  to  make  this  explanation. 
That  may  have  been  one  of  those  peculiarities  and  may  explain  why 
he  should  do  it.  I don’t  suppose  that  he  ever  thought  that  that  book 
would  be  used  for  the  purpose  attempted  here. 

Mr.  Voigt.  No. 

Mr.  Lightfoot.  And  if  he  did  not  there  would  not  be  any  reason 
for  concealing  under  key  names,  ciphers,  or  anything  of  that  kind, 
these  parties,  their  names.  But  I will  call  your  attention  to  this — - 
I have  never  read  it  over  but  one  time,  and  that  was  immediately 
after  the  Federal  Trade  Commission  report  was  out.  I don't  recall 
all  the  things  in  it,  but  my  recollection  is  that  there  is  not  a single, 
solitary  statement  anywhere  in  it  that  deals  with  any  future  division 
of  purchases  of  any  kind  on  an  agreed  basis.  All  of  those  things 
relate  to  what  had  been  done.  “What  did  you  do?”  “What  have 
you  done?”  We  will  tell  you  that  any  time.  If  you  want  to  know 
how  many  cattle  we  bought  in  any  market  in  the  country,  we  would 
tell  you  or  any  one  that. 

Mr.  Voigt.  Well,  now,  I don’t  think  you  are  making  a fair  state- 
ment there.  I am  confining  myself  to  what  is  contained  in  this 
book,  and  I think  the  committee  can  read  the  English  language  and 
draw  its  own  conclusions  as  to  just  what  this  language  means. 

Mr.  Lightfoot.  Well,  I am  not  trying  to  be  unfair,  I just  wanted 
to  make  that  explanation  in  relation  to  that.  And  furthermore, 
I will  s&y  this,  that  my  construction  of  it,  if  you  care  anything  for  it, 
would  be  the  very  thing  that  I was  talking  about,  that  Mr.  Creigh 
pointed  out,  that  in  New  York,  if  the  situation  was  that  Armour 
was  getting  too  much  stuff  in  there,  and  was  producing  a glut,  and  a 
waste,  so  that  he,  Sulzberger,  couldn’t  make  a dollar  on  anything 
that  he  was  slaughtering,  and  that  Armour  was  losing  money  on 
what  he  was  shipping  in  there,  that  by  reducing  his  shipments  into 
that  market  10  per  cent,  which  would  more  exactly  meet  the  de- 
mands there,  that  it  would  be  a legal  proposition,  and  I would  not 
hesitate  a minute  to  advise  any  client  that  they  could  do  that  to-day 
under  the  injunction  case  approved  by  the  Supreme  Court  of  the 
United  States. 

And  that  is  what  the  producers  all  over  the  country  are  doing  as 
far  as  they  can,  and  that  is  what  is  contemplated  in  the  Volstead- 
Capper  bill  that  has  been  offered  here.  I think  it  is  an  economic 
proposition. 

I think  there  are  a lot  of  statements  in  there,  of  course,  that  would 
justify  the  very  conclusions  that  you  draw.  But  when  it  is  under- 
stood and  explained,  I don’t  believe  they  should  be  so  construed. 
Mr.  Armour  has  never  been  asked  for  an  explanation  of  that.  Now, 
Mr.  Armour  is  living.  The  Federal  Trade  Commission  never  filed  a 
complaint  or  attempted  to  find  out  what  those  things  meant.  They 
could  have  done  so.  But  they  published  them  and  of  course  left  it 
open  for  everybody  to  draw  their  own  conclusion. 

Mr.  Voigt.  Well,  I think  that  this  “Black  Book,”  so  far  as  I have 
read  it  into  the  record,  is  self-explanatory.  I think  any  man  with 
reasonable  sense  can  draw  his  own  conclusions. 

Now,  Mr.  Creigh,  will  you  turn  to  page  221  of  the  “Black  Book.” 
You  will  find  there,  a short  ways  from  the  top,  this  language: 

Question  of  eastern  killing  of  sheep  and  lambs,  whether  or  not  this  be  included, 
was  discussed  but  not  decided.  Klee  claimed  export  cattle  1910  should  be  included. 
Sanford  opposed.  I stated  that  this  was  more  than  the  mere  purchasing  of  stock. 


456 


MEAT  PACKER. 


As  I have  said  before,  “Klee,”  stands  for  Morris,  and  “ Sanford, ” 
for  Armour.  Now  he  says  here  that  the  question  of  killing  sheep 
and  lambs  was  discussed,  but  not  decided.  Does  that  convey  to  j 
your  mind  that  these  men  were  making  some  sort  of  an  agreement 
on  the  killing  of  sheep  and  lambs  in  the  East  ? 

Mr.  Creigh.  Well,  of  course,  again  I notice  that  following  down 
the  statement  there  is  no  mention  of  Cudahy  there  at  all. 

Mr.  Voigt.  No;  I don’t  claim  now  that  Cudahy  is  involved  in  the 
question  I am  now  asking  you,  Mr.  Creigh 

Mr.  Creigh.  Well,  then  you  agree  with  me,  Mr.  Voigt,  that  so 
far  from  this  being  evidence  that  the  Big  Five  had  a conspiracy, 
that  it  is  directly  to  the  contrary. 

Mr.  Voigt.  No;  I don’t  agree  with  you  on  that  at  all.  I am 
just  asking  you  what,  in  your  opinion,  was  the  transaction  between 
these  two  men  that  was  referred  to  in  this  question  ? 

Mr.  Creigh.  Very  well.  Good.  Now,  just  for  a pure  guess,  I 
think  that  everything  in  that  memorandum  refers  to  export  busi- 
ness, either  from  the  Argentine  or  Australia  or  somewhere  to,  prob- 
ably, England. 

Mr.  Voigt.  Well,  assuming  that  that  is  true,  does  it  show  to  you 
that  they  were  discussing  some  sort  of  an  agreement  among  them- 
selves with  reference  to  the  sheep  and  lamb  business.? 

Mr.  Creigh.  Well,  there  is  some  sheep  and  lamb  business  that 
is  obviously  being  discussed,  but  the  rest  of  the  memorandum  is 
entirely  outside  of  the  United  States,  it  seems  to  me.  I would  infer 
that  that  refers  to  some  export  trade. 

Mr.  Voigt.  I understand  it  refers  to  export  trade,  but  I am 
asking  you,  Mr.  Creigh 

Mr.  Creigh  (interposing).  I mean  by  11  export”  either  their 
houses  in  Argentine  or  Australia,  or  their  shipments  to  Great 
Britain. 

Mr.  Voigt.  Well,  I understand  that  all  the  packers  deny  that 
they  are  in  any  combination  with  reference  to  export  trade. 

Mr.  Creigh.  Well,  this  is  what  I mean.  They  may  talk  in  this 
country  with  reference  to  what  the  Argentine  plants  are  going  to 
do,  and  how  they  are  going  to  ship  stuff  from  Argentina  to  Great 
Britain.  Now,  that  is  no  combination  in  the  United  States  for  any 
export  trade. 

Mr.  Voigt.  Well,  now,  then,  they  in  this  memorandum  here 
mention  specific  figures,  and  it  says  that  the  question  of  killing  sheep 
and  lambs  was  discussed  but  not  decided.  Now,  I am  asking  you 
whether  that  does  not  reasonably  mean  that  they  were  trying  to 
get  together  on  some  figures  with  regard  to  the  export,  if  you  please, 
of  sheep  ? 

Mr.  Creigh.  Well,  I think  it  might  well  refer  to  the  export,  but 
I don’t  see,  for  the  guess,  perhaps,  where  the  export  is  being  made 
from.  Here  is  one  line — and  it  is  just  two  lines  below  where  you 
read — in  which  there  are  some  figures  here  that  exclude  17,000 
exported  from  Canada,  and  there  is  talk  of  the  Argentine  and 
Sansinena. 

Mr.  Voigt.  Now,  I want  to  read  to  you  further  from  the  same 
page,  Mr.  Creigh: 

Sanford  shows  11.79,  including  exports,  as  against  11.73,  excluding  exports  for 
Sand.  Klee  claimed  account  been  formerly  exported  by  others  having  included 
therefore  cattle  exported  1910  should  also  be  included,  Sanford  claimed  this  incorrect. 


MEAT  PACKER. 


457 


Does  that  show  to  you  at  all  that  these  men  were  getting  together 
on  the  matter  of  parceling  out  purchases  or  sales  of  live  stock? 

Mr.  Creigh.  Well,  I should  say  the  inference  from  that  is  that 
they  are  talking  Argentine  business. 

Mr.  Voigt.  Well,  now,  assuming  that  it  does  refer  to  Argentine 
business,  or  any  other  business,  I am  asking  you:  Does  that  fairly 
bear  the  inference  that  these  men  were  talking  about  some  agree- 
ment among  themselves  with  reference  to  the  purchase  or  sale  of 
live  stock? 

Mr.  Creigh.  In  Argentina,  I should  say  that  is  the  inference. 
I think  that  would  be  entirely  legal. 

Mr.  Voigt.  I think  that  is  all  I want  to  ask. 

The  Chairman.  The  time  is  up,  but  do  you  want  to  ask  him  a 
question,  Mr.  McLaughlin? 

Mr.  McLaughlin  of  Nebraska.  I think  this  can  be  discussed  all  in 
a minute.  Now,  this  is  in  the  hearing  before  the  Interstate  and 
Foreign  Commerce  Committee  of  the  House,  on  II.  R.  13324,  January 
31  to  February  14,  1919,  part  5.  Of  course  this  same  thing  could  be 
found  in  a number  of  these  other  hearings,  but  I just  happened  to 
run  across  it  here.  It  occurred  to  me,  in  connection  with  the  dis- 
cussion of  the  Borland  resolution  and  the  propaganda  that  was  set 
into  motion  to  defeat  it,  and  the  statement  has  been  made  by  several 
here  that  the  only  object  of  that  propaganda  or  the  only  reason 
directed  against  the  resolution  was  because  the  resolution  itself  sets 
forth  specific  charges.  Now,  here  is  a statement  made  to  Louis 
Swift  on  the  3d  of  April,  I suppose  1913,  signed  by  R.  C.  McManus, 
J.  M.  Chaplin,  and  Arthur  D.  White,  on  page  1421  of  this  hearing. 
Their  statement  is  lengthy,  the  statement  they  have  made  to  Mr. 
Swift  relative  to  this  resolution,  but  I call  your  attention  to  this 
paragraph  and  ask  you  to  make  an  explanation  of  it.  [Reading:] 

We  believe  the  situation  to  be  serious  and  recommend  that  due  consideration  be 
immediately  given  to  it  and  that  everything  be  done  in  every  direction  to  head  off 
the  present  movement  and  to  relieve  the  tension.  We  believe  that,  as  it  stands  to- 
day, nothing  could  stop  criminal  prosecutions  and  that  the  situation  is  dangerous 
where  men  like  Burke,  who  have  been  in  the  business  all  their  lives,  regard  trivial 
and  irrelevant  circumstances  as  conclusively  proving  unlawful  operations. 

Now,  just  what  do  you  understand  by  that  statement  in  this  letter 
to  Mr.  Swift,  signed  by  these  three  men? 

Mr.  Creigh.  Who  are  the  three  men,  if  you  please  ? 

Mr.  McLaughlin  of  Nebraska.  R.  C.  McManus,  J.  M.  Chaplin,  and 
Arthur  D.  White.  They  say  in  that  statement: 

We  believe  that,  as  it  stands  to-day,  nothing  could  stop  criminal  prosecutions. 

Mr.  Creigh.  Well,  now,  of  course  you  understand  that  those  three 
men  signing  that  letter  are  employees  of  Swift  & Co.  ? 

Mr.  McLaughlin  of  Nebraska.  Yes,  sir. 

Mr.  Creigh.  And  they  were  obviously  in  Washington  at  that  time. 
I would  like  to  ask  one  other  thing.  There  are  a long  series  of 
initials,  I think,  on  that  letter,  aren’t  there;  that  is,  on  the  copy, 
toward  the  end  there  ? 

Mr.  McLaughlin  of  Nebraska.  Yes,  sir. 

Mr.  Creigh.  I think  you  will  find  some  initials,  “T.  C.,”  are  down 
there. 

Mr.  McLaughlin  of  Nebraska.  Well,  here  are  “J.  R.” 

Mr.  Creigh.  The  very  last  one,  as  I remember  it. 


458 


MEAT  PACKER. 


Mr.  McLaughlin  of  Nebraska.  I don’t  see  any. 

Mr.  Creigh.  At  the  end,  the  last  one. 

Mr.  McLaughlin  of  Nebraska.  I don’t  find  the  initials  “T.  C.” 
here. 

Mr.  Creigh.  Well,  at  one  time  in  one  of  the  Federal  Trade  Com- 
mission reports  they  had  “T.  C.”  on  there  as  being  Thomas  Creigh, 
obviously,  who  received  a copy  of  that  letter,  and  I took  it  up  to 
find  about  it,  and  it  developed  that  the  “T.  C.”  had  been  written  on 
by,  I think,  some  Trade  Commission  examiner  in  order  to  make  his 
story  that  1 had  had  a copy  of  that  letter.  I never  had  had  it. 

Now,  as  far  as  Cudahy’s  situation  with  respect  to  the  Borland 
resolution  is  concerned,  if  you  will  permit  me,  I would  simply  like  to 
put  into  the  record  the  testimony  that  I gave  before  the  House  Com- 
mittee on  the  Judiciary  in  1916.  That  will  show  you  perfectly  what 
our  contention  was  with  respect  to  the  Borland  resolution. 

It  was  just,  I think,  as  Mr.  Veeder  outlined  it  this  morning,  that 
as  far  as  the  committee  in  Congress  practically  by  resolution  finding 
that  we  are  guilty  of  criminal  offenses,  we  did  not  think  that  was  a 
fair  proposition.  Nor  would  it  be  to  put  it  up  to  the  Federal  Trade 
Commission  in  the  form  of  that  resolution  to  investigate  and  find  out 
whether  it  was  not  so. 

Mr.  McLaughlin  of  Nebraska.  Well,  this  statement — 11  As  it  stands 
to-day  nothing  could  head  off  criminal  prosecution” — does  that  mean 
as  conditions  are  generally,  or  as  our  business  is  organized,  or  as  our 
practice  has  been  ? What  does  that  mean  ? 

Mr.  Creigh.  My  impression  has  been  this 

Mr.  Veeder.  Suppose  I answer  that,  Mr.  Creigh. 

Mr.  Creigh.  Suppose  I make  a guess  at  it,  please. 

Mr.  Veeder.  All  right. 

Mr.  Creigh.  Here  is  a tremendous  effort  being  made  at  that  time 
by  all  sorts  of  propagandist  interests  to  have  the  Federal  Trade  Com- 
mission or  somebody  investigate  the  packers  at  that  time.  My  guess 
would  be  that  of  course  it  is  perfectly  easy  to  indict  a packer  at  any 
time;  that  is  quite  common.  It  is  good  politics,  regardless  of  evi- 
dence or  anything  else.  Somebody  may  have  feared  that  that  was 
part  of  the  propaganda  to  try  to  secure  an  indictment.  There  is  cer- 
tainly nothing  in  it  that  indicates  that  there  might  have  been  a 
conviction. 

Mr.  Veeder.  That  last  sentence  there  that  you  read  explains  it. 
Will  you  read  it  again  ? The  very  last  sentence  of  the  paragraph 
you  read. 

Mr.  McLaughlin  of  Nebraska  (reading) : 


We  believe  that  as  it  stands  to-day  nothing  could  stop  criminal  prosecutions  and 
that  the  situation  is  dangerous  when  men  like  Burke,  who  have  been  in  the  business 
all  their  lives,  regard  trivial  and  irrelevant  circumstances  as  conclusively  proving 
unlawful  operations. 


Mr.  Veeder.  The  last  sentence  explains  it.  Now,  there  was  such 
an  agitation  down  here  at  that  time  that  Mr.  McManus  and  Mr. 
Chaplin  were  afraid  that  without  anything  more  than  trivial  circum- 
stances, that  the  matter  would  be  submitted  to  the  grand  jury  and 
that  we  would  probably  be  indicted  and  have  to  go  through  a trial. 
Now,  perhaps  you  don’t  know  what  a trial  means  for  the  packers. 
A trial  for  the  packers  means  three  months.  The  trial  in  1911  lasted 
three  months.  The  trial  in  1905  lasted  about  the  same  length  of 


MEAT  PACKER. 


459 


time.  And  in  1905  the  judge  was  brought  to  Chicago  from  out  of 
the  city — a strange  judge  was  brought  there  by  the  Government. 
And  it  is  a pretty  serious  thing  to  be  put  on  trial  for  three  months, 
with  a jury  that  is  likely  to  be  prejudiced  by  the  publicity  that  is 
given  to  the  case,  and  the  charges  that  are  made,  whether  there  is 
only  trivial  evidence  or  not.  Now,  that  is  what  Mr.  McManus  and 
Mr.  White  and  Mr.  Chaplin  meant  when  they  wrote  that  letter,  that 
there  was  so  much  agitation  down  here,  that  there  was  so  much  talk 
and  charging  that  the  packers  were  violating  the  law,  that  they  would 
be  indicted  even  if  there  was  nothing  more  than  trivial  charges  made. 
And  I say  that  is  what  happened  to  us  in  1911.  At  that  trial  the 
jury  brought  in  a verdict  of  not  guilty  after  three  months,  and  it 
didn't  take  the  jury  more  than  a very  few  minutes  to  bring  in  the 
verdict. 

The  Chairman.  What  page  of  the  record  was  that  letter,  Mr.  Mc- 
Laughlin, that  you  just  read  from? 

Mr.  McLaughlin  of  Nebraska.  Page  1421. 

The  Chairman.  Have  you  anything  further,  Mr.  Creigh  ? 

Mr.  Creigh.  No;  that  is  all,  except  I would  like  to  put  into  the 
record  my  testimony  on  the  Borland  resolution  hearing. 

The  Chairman.  Without  objection,  it  may  go  into  the  record. 

(Mr.  Creigh's  statement  at  the  hearing  before  the  Committee  on 
the  Judiciary  in  June,  1916,  is  herewith  printed  in  full,  as  follows:) 

STATEMENT  OP  ME.  THOMAS  CREIGH. 

Mr.  Creigh.  I ara  general  attorney  for  the  Cudahy  Packing  Co.,  and  that,  gentle- 
men, means  not  so  much  an  attorney  practicing  in  the  courts  there  as  one  sitting  right 
on  the  inside  of  the  business  constantly,  as  a stockholder,  and  one  of  the  coworkers 
out  there  in  a large  organization,  trying  to  know  something  about  the  many  details  of 
a very  large  business.  The  question  has  been  asked  several  times  here  this  morning — 
and  very  pertinently— as  to  why  it  is  that  the  packers,  or  certain  of  the  packers,  would 
object  to  this  investigation.  Now,  from  the  standpoint  of  our  people,  I might  say  that 
this  is  the  thought  that  is  rather  bothering  us.  Fn  m its  constructive  side,  and  the 
economic  side,  as  has  been  emphasized  here,  we  think  that  worldng  in  cooperation 
with  the  cattle  raisers,  and  with  certain  departments  of  the  Government,  there  are 
very  great  constructive  possibilities  about  perhaps  not  so  much  the  changing  of  prices 
materially,  the  cheapening  of  this  product  or  that  product,  but  the  stabilizing  at  least 
of  an  industry  which  will  permit  the  middleman  in  between  to  share  in  the  general 
advantage  of  being  able  to  operate  more  efficiently.  Nov/,  I think  our  position  is,  as 
Mr.  Meeker  has  stated,  that  with  the  Department  of  Agriculture  knowing  the  physical 
operation  of  the  plants,  with  the  great  field  tor  possible  improvement — that  of  the 
improvement  of  the  health  of  the  live  stock  of  the  country,  the  intensifying  of  their 
production,  saving  both  the  packer  and  the  live-stock  owner  from  losses  by  disease — 

that  there  is  a tremendous  field  there  in  which  we  can  cooperate.  Similarly 

Mr.  Gard  (interposing).  Have  you  ever  suggested  to  any  governmental  department 
such  cooperation? 

Mr.  Creigh.  1 think  that  lias  been  done  almost  constantly. 

Mr.  Gard.  Has  your  concern  ever  done  that? 

Mr.  Creigh.  Yes,  indeed;  and  it  is  on  record  that  we  desire  constantly  to  try 
and  cooperate.  I should  say  that  has  constantly  been  the  case  for  six  months,  and 
several  times  before,  at  different  periods,  I can  recall  it  being  taken  up. 

Mr.  Gard.  Since  this  investigation  has  been  going  on? 

Mr.  Creigh.  That  is  since  this  investigation;  yes.  I have  done  it  since  the  inves- 
tigation, and  also  prior  to  the  investigation  many  times. 

Mr.  Borland.  You  did  not  appear  at  their  hearing  in  Chicago  that  the  Bureau  of 
Markets  had  there? 

Mr.  Creigh.  No;  I did  not  appear  there. 

Mr.  Borland.  Your  company  did  not  appear? 

Mr.  Creigh.  No;  that  is  true. 

Mr.  Borland.  They  went  there  for  the  purpose  of  inviting  this  cooperation,  hut 
you  did  not  appear? 


460 


MEAT  PACKEK. 


Mr.  Creigh.  That  is  true  as  well. 

Mr.  Borland.  But  since  these  hearings  have  been  started,  these  offers  have  ta^en 
place? 

Mr.  Creigh.  Yes;  and  prior  to  that  several  offers  had  been  made,  and  I think 
one  of  the  mistakes  that  the  packers  generally  made  was  in  not  attending  that  hear- 
ing. 

Mr.  Borland.  I think  so  myself. 

Mr.  Creigh.  But  my  company,  even  though  it  was  'willing  to  put  up  the  facts  at 
that  hearing,  could  not  undertake  the  defense  of  an  entire  industry,  so  we  were  not 
present  at  the  hearing.  On  the  constructive  side  of  the  question  of  the  meat-inspec- 
tion division  there  are  vast  reforms  and  tremendous  economies  that  can  be  worked  out 
by  the  better  cooperation  between  the  packers  and  the  Bureau  of  Animal  Industry, 
and  that  without  in  the  slightest  degree  impairing  the  service.  One  of  the  most  tre- 
mendous difficulties  and  greatest  handicaps  that  the  packers  are  up  against  is  the 
fact  that  under  the  meat-inspection  law,  it  being  a Federal  law,  it  acts,  of  course, 
only  in  interstate  commerce,  and  in  every  one  of  the  large  cities  of  the  country  we  are 
up  against  what  we  feel  is  unfair  competition,  which  is  absolutely  demoralizing  in 
certain  fields  where  the  local  and  uninspected  slaughterer  has  the  advantage  of  the 
market,  which  tremendously  affects  our  business.  Now,  when  it  comes  to  interstate 
shipments  of  diseased  live  stock,  there  is  one  very  large  field  in  there  where  the  Na- 
tional Government  can  go  a great  deal  further  than  it  has  gone,  and  vastly  to  the  bene- 
fit of  the  consumers  of  the  United  States. 

Now,  at  the  same  time,  while  we  are  in  line  for  every  possible  endeavor  to  build 
up  the  constructive  side  and  to  help  in  every  way  we  can,  particularly  because  we 
need  it — no  w I am  speaking  from  the  Cudahy  standpoint — the  beef  business  in  our 
industry  is  the  least  remunerative  part  of  the  industry.  If  we  could  get  out  of  the 
beef  business  we  would  get  out  of  it.  We  have  got  our  investments  which  tie  us 
down.  The  underlying  difficulty  as  to  why  it  is  not  profitable  is  the  question  which 
Mr.  Meeker  and  other  persons  faniliar  with  the  business  have  emphasized. 

Mr.  Carlin.  Has  not  the  money  which  you  have  made  and  which  you  have  put 
into  these  investments  which  you  spoke  of  come  out  of  the  beef  business? 

Mr.  Creigh.  No;  not  at  all.  The  money  in  our  business  is  money  that  has  been 
put  into  it.  The  money  that  the  packers  make  is  very  largely  what  they  make  out  of 
their  hogs,  I should  say. 

Mr.  Carlin.  What  is  your  capital? 

Mr.  Creigh.  $14,000,000  at  the  present  time. 

Mr.  Carlin.  What  is  your  surplus? 

Mr.  Creigh.  Oh,  $3,500,000;  something  like  that. 

Mr.  Carlin.  How  much  of  that  has  been  put  in  from  earnings? 

Mr.  Creigh.  From  earnings? 

Mr.  Carlin.  Yes. 

Mr.  Creigh.  Well,  I do  not  know.  I can  not  think  back  over  the  books  fast  enough, 
but  I will  say,  out  of  $17,000.000 — $10,000,000  probably  out  of  the  earnings  of  25  years. 

Mr.  Carlin.  So  your  capital  has  practically  been,  half  of  it,  put  in  out  of  earnings? 

Mr.  Creigh.  At  the  same  time  we  have  been  in  business  for  25  years,  and  the  stock- 
holders who  have  not  taken  their  earnings  out  of  the  business  have  left  it  in  to  go 
ahead  and  expand  and  try  to  do  business. 

Mr.  Carlin.  How  much  have  your  stockholders  taken  out  at  various  times  in  25 
years? 

Mr.  Creigh.  I have  not  been  a stockholder  all  of  that  time,  but  I have  been  in  the 
last  five  yeirs,  and  we  have  not  gotten  4 per  cent  out  of  it  per  annum. 

Mr.  Carlin.  That  is,  4 per  cent  on  the  $17,000,000? 

Mr.  Creigh.  No;  that  is  4 per  cent  on  the  $14,000,000. 

Mr.  Carlin.  How  much  would  that,  at  4 per  cent,  amount  to  in  25  years?  Can 
you  make  the  mental  calculation? 

Mr.  Creigh.  A hundred  per  cent,  if  you  compound  it. 

Mr.  Carlin.  There  never  has  been  a time  when  you  were  adding  this  capital  to 
your  business  that  you  have  not  paid  your  stockholders  a dividend,  has  there? 

Mr.  Creigh.  Out  of  the  last  five  years  we  have  paid  but  one  year  or  two  at  the  most. 

Mr.  Carlin.  A dividend? 

Mr.  Creigh.  On  the  common  stock.  There  is  $2,000,000  preferred  and  $12,000,000 
common.  Out  of  the  last  five  years  we  have  paid  two  common  dividends.  I know 
that,  and  I appreciate  it  out  of  my  own  pocket.  We  have  a statement  here  of  the 
earnings.  Two  of  the  years  we  were  down  to  several  hundred  thousand  dollars  for 
net  earnings,  and  in  several  of  them  we  went  up  to  a million  and  a quarter.  Between 
the  beef  end  and  the  provision  end  we  make  our  money  out  of  the  hogs  and  the  pro- 
visions. You  only  make  it  in  one  way.  You  are  dealing  in  a cured  product,  which 


MEAT  PACKET. 


461 


you  can  hold,  and  make  your  money  out  of  it,  and  out  of  what  you  may  make,  if  you 
have  the  market  conditions  sized  up  right,  you  pay  your  losses  on  your  beef,  and  that 
is  the  way  the  business  is  run  very  largely. 

Mr.  Gard.  Do  the  packers  make  their  money  out  of  cured  meats  rather  than  fresh 
meats? 

Mr.  Creigh.  Surely.  The  underlying  difficulty  is  that  when  you  have  fresh 
product  you  are  at  the  mercy  of  the  fellow  who  is  going  to  buy  it  from  you.  You  can 
not  forecast  the  market.  A Jewish  holiday  or  a fish  Friday  or  a Fourth  of  July  or  a 
wet  week  or  an  extra  hot  one,  that  drives  the  people  from  the  cities,  will  affect  the 
market  faster  than  they  can  possibly  take  it  off  from  the  beef  end  out  in  the  yards. 
You  buy  cattle  this  week  for  next  week’s  market. 

If  anybody  can  foretell  this  week  how  many  people  will  be  in  the  hotels  in  the  city 
oof  New  York  or  at  Atlantic  City  next  week,  if  he  has  a hunch  different  from  the  other 
people,  he  probably  can  make  money  out  of  his  cattle  purchases  and  his  beef  sales, 
but  if  the  weather  goes  against  him,  instead  of  making  a dollar  or  a dollar  and  a quarter 
a head,  which  nobody  might  figure  on,  he  will  lose  $10  or  $15  a head,  and  that  is  where 
the  whole  difficulty  is  in  the  fresh-meat,  business.  The  most  curious  anomaly  in  the 
25  years’  history  of  the  United  States  is  that  the  packers  have  always  been  arraigned 
by  public  opinion  on  the  most  undesirable  and  unprofitable  end  of  their  business. 

Mr.  Carlin.  If  the  beef  business  is  undesirable  and  unprofitable,  why  do  you  not 
close  out  that  end  of  the  business? 

Mr.  Creigh.  Because  they  have  their  packing  houses  already  constructed  and  their 
branch  houses  already  built.  It  is  just  a gamble  as  to  whether  or  not  you  had  better 
shut  up  your  business  or  try  to  protect  your  investment  by  going  ahead.  As  I have 
read  in  connection  with  the  hearings  in  November,  very  much  emphasis  was  laid  on 
the  increase  in  sales  per  annum  during  the  last  5 or  10  years  by  each  of  the  packers. 
Those  increased  sales  were  due  primarily  to  two  things — the  increasing  cost  of  live 
stock,  which  necessitated  increasing  the  selling  price,  therefore,  of  the  products  from 
it,  and,  secondly,  the  fact  that  with  the  shortage  of  beef  in  this  country  as  compared 
to  the  old  days  when  it  was  cheap,  every  packer  has  to-day  to  get  into  these  outside 
lines  of  business,  particularly  those  of,  say,  cheese,  butter,  and  poultry.  Why  do  they 
get  into  them?  They  have  already  got  their  fixed  investment  in  refrigerating  plants 
and  branch  houses,  as  I may  call  them,  in  the  great  cities  of  the  country.  Their 
fresh-meat  production  is  not  sufficient  to  keep  them  busy.  It  is  costly  to  keep  them 
going,  so  in  order  to  make  a profit  out  of  them  they  all  try  to  get  into  these  side  lines 
to  carry  their  overhead  expense  through  these  outside  products. 

Now,  as  I wanted  to  emphasize  this  morning,  our  company  is  not  at  all  opposed  to 
any  constructive  investigation  that  will  work  practically  with  us  to  help  try  to  solve 
some  of  these  questions,  but  when  a resolution  comes  along,  gentlemen,  and  picks  out 
my  company  by  name,  where  we  have  had  a record  of  at  least  10  years  of  not  having 
been  under  an  indictment  or  investigation,  and  when  the  lower  House  of  Congress 
practically  passes  a resolution,  in  form  saying,  “Here  is  Cudahy  & Co.,  who  are  guilty 
of  criminal  violations  of  the  law;  take  them  over  before  the  Trade  Commission  and  find 
out  whether  they  are  or  not,”  I do  not  think  that  there  is  any  doubt  in  the  minds  of 
any  of  you  gentlemen  but  what,  when  that  happens,  our  desire  to  cooperate  is  very 
largely  gone.  All  along  through  the  legislation  for  the  Trade  Commission  we  at 
Chicago,  I think,  have  all  been  peculiarly  friendly  to  the  idea,  believing  that  in  it 
were  great  constructive  possibilities,  but  I do  not  think  that  any  friend  of  the  Trade 
Commission  is  going,  this  early  in  their  career,  to  set  them  out  again  onto  this  thing, 
where  the  business  interests  of  the  country  generally  have  feared  they  might  be  sub- 
jected to  a hounding  by  the  Trade  Commission  under  the  operation  of  the  law.  I 
think  we  have  gone  too  far  for  that,  gentlemen.  These  are  big  practical  questions 
that  we  can  work  out.  Now,  my  reluctance  to  have  this  go  to  the  Trade  Commission 
at  this  time  is  not  because  I do  not  believe  that  they  have  constructive  powers,  but 
because  of  the  flat  statements  in  this  resolution  with  reference  to  the  destructive  or 
prosecuting  powers,  and  the  Trade  Commission,  as  we  all  know,  has  relatively  slender 
funds  at  the  present  time,  and  has  a vast  amount  of  accumulated  work  on  hand  now. 
The  best  thing  for  the  consumer  and  for  the  packer  and  for  the  live-stock  shipper  is  to 
let  us  go  to  the  Department  of  Agriculture,  which  is  in  touch  with  our  business,  and 
there  is  where  we  can  make  some  progress  which  will  be  beneficial  to  all  concerned. 

Mr.  Carlin.  But  they  have  no  power  there. 

Mr.  Creigh.  Nobody,  when  he  cooperates,  needs  any  compulsion,  Mr.  Chairman  . 
The  compulsion  about  it,  the  threat  of  examining  witnesses,  is  in  line  with  the  de- 
structive possibilities  here,  and  if  you  take  that  out  of  your  resolution,  my  people  will 
have  nothing  against  it.  Here  we  are  with  a fair  record  for  at  least  10  years,  believing 
that  we  have  kept  the  law,  and  here  is  the  lower  House  of  Congress  writing  our  name 
into  this  resolution,  and  practically  charging  us  with  violations  of  the  law. 


462 


MEAT  PACKER. 


Mr.  Carlin.  What  objection  could  you  have  to  giving  them  the  power  to  summon 
witnesses?  If  you  are  going  to  tell  the  story  anyway,  why  object  to  telling  it  under 
oath? 

Mr.  Creigh.  Well,  I have  no  hesitancy  against  telling  the  story  or  against  telling 
it  under  oath;  but  certainly  we  all  agree  that  this  resolution  has  written  into  it  very 
much  more  with  regard  to  violations  of  the  antitrust  laws  and  the  criminal  possibilities 
than  the  power  to  summon  witnesses. 

Mr.  Fisher.  Have  you  seen  a copy  of  the  suggested  amendment  which  I sent  to 
Mr.  Yeeder? 

Mr.  Creigh.  He  passed  that  to  me,  and  in  one  paragraph  you  practically  charge  us 
with  violating  the  antitrust  laws,  and  in  the  next  paragraph  you  say  you  do  not  know 
whether  we  are  violating  them  or  not. 

Mr.  Fisher.  You  will  agree  that  the  greater  portion  of  that  resolution  does  not 
have  to  do  with  these  things  to  which  you  object,  will  you  not? 

Mr.  Creigh.  The  thing  to  which  I object  is  passing  any  resolution  that  has  the 
Cudahy  Packing  Co.  specifically  charged  with  a violation  of  the  law  by  name — a 
violation  of  the  antitrust  laws — and  has  that  charge  sent  to  the  Federal  Trade  Com- 
mission. In  view  of  that  aspect  it  does  not  conduce  to  cooperation  that  has  been 
spoken  of,  and  you  and  I,  Mr.  Fisher,  know  that  that  is  the  only  way  you  can  get  any 
beneficial  results  out  of  this  proposition. 

Mr.  Fisher.  When  the  time  comes  I will  have  my  reply  for  you.  I do  not  want 
to  interrupt  you. 

Mr.  Carlin.  There  is  no  intention  on  the  part  of  these  gentlemen  asking  for  this 
resolution  to  interfere  with  the  progress  of  this  industry,  but  there  is  an  effort  to  pre- 
vent, if  such  a thing  is  being  done,  cooperation  on  the  part  of  you  gentlemen  to  control 
the  prices  of  the  animal  to  the  consumer  and  to  the  feeder. 

Mr.  Creigh.  Yes. 

Mr.  Carlin.  Now,  that  is  the  gist  of  this  proposition.  Of  course,  beyond  that  there 
is  a broader  question  as  to  how  these  things  will  affect  the  consumer. 

Mr.  Creigh.  Yes. 

Mr.  Carlin.  But  I do  not  think  it  is  any  impeachment  of  your  integrity  if  we  put 
the  power  somewhere  to  compel  your  attendance  when  they  want  you  and  to  compel 
you  to  testify  when  they  desire  to  have  you  testify. 

Mr.  Creigh.  Certainly,  you  gentlemen  of  this  committee  here,  if  I should  draft 
a resolution  in  terms  citing  you,  by  name,  as  possible  violators  of  the  law,  would 
hardly  feel  kindly  toward  the  idea  that  you  had  to  go  to  work  with  me  in  solving 
some  problem  which  you  had  before  you.  As  regards  my  people,  I venture  the  asser- 
tion that  there  is  not  a single  syllable  in  this  entire  record  that  is  before  you  by  any 
witness  who  knows  anything  about  the  packing  business  or  its  organization  that 
comes  anywhere  near  charging  us  with  any  violation  of  the  law. 

Mr.  Carlin.  Witnesses  have  testified  that  the  price  that  you  pay  is  about  the  same 
as  the  other  fellow  pays  for  the  animal  at  Chicago. 

Mr.  Creigh.  Precisely. 

Mr.  Carlin.  And  that  there  is  no  competition  between  you  and  him. 

Mr.  Creigh.  When  he  says  there  is  no  competition,  Mr.  Chairman,  that  does  not 
follow  simply  because  there  is  a similarity  in  price.  My  company  is  one  of  the  smallest 
in  size,  yet  the  difference  of  one-eighth  of  a cent  a pound  means  the  making  or  a loss 
of  $1,000,000. 

Mr.  Fisher.  You  mean  the  difference  in  the  spread  between  the  cost  and  what 
you  get? 

Mr.  Creigh.  No,  sir;  I mean  if  I sell  my  product — assuming  a constant  price  through- 
out the  year,  which,  of  course,  is  not  the  fact — if  I could  get  one-eighth  of  a cent  more 
on  every  sale  I make  throughout  the  year,  we  would  get  $1,000,000  more. 

Mr.  Fisher.  Assuming  that  your  cost  remained  the  same? 

Mr.  Creigh.  Of  course,  that  is  true.  If  our  people  in  our  agencies  throughout  the 
country  and  around  the  world  are  not  keen  enough  salesmen  to  get  that  one-eighth 
of  a cent  we  do  not  get  anything.  If  our  salesmen  drop  that  down  one-eighth  further 
we  lose  that  $1,000,000. 

Mr.  Carlin.  You  say  this  resolution  carries  the  implication  that  you  are  violating 
the  law? 

Mr.  Creigh.  Absolutely.  In  view  of  the  famous  Garfield  report,  I say  that.  The 
lower  House  of  Congress  has  passed  a resolution  with  this  phraseology  in  it  directing 
them  practically  to  find  that  there  are  violations  of  the  law.  I say  that  a subordinate 
bureau  of  the  Government  is  apt  to  be  pretty  strongly  of  the  notion,  when  they  operate 
under  your  directibns,  to  go  out  and  work,  instead  of  on  the  constructive  side,  to  see 
if  they  can  not  find  something  on  somebody. 

Mr.  Carlin.  Suppose  they  do  that,  and  suppose  it  is  not  there;  they  can  not  find 
it,  can  they? 


MEAT  PACKER. 


463 


Mr.  Creigh.  In  our  smaller  company,  we  have  some  10,000  employees.  We 
operate  in  most  of  the  large  cities,  especially  those  of  the  Northeast,  and  we  operate 
up  and  down  the  line,  and  we  have  all  sorts  of  angles  from  which  we  can  be  approached. 
If  this  investigation  is  to  be  undertaken  on  the  basis  of  having  individual  investi- 
gators go  up  and  down  the  line  inquiring  of  our  employees  here  and  there,  we  will 
be  kept  so  busy  that  there  will  not  be  any  chance  to  cooperate  with  anybody. 

Mr.  Taggart.  If  the  wrong  exists,  that  ought  to  be  done. 

Mr.  Creigh.  I only  wish  you  gentlemen  had  been  with  me  on  the  firing  line,  so  to 
speak,  of  the  packers,  and  could  know  practically  what  an  investigation  means  with 
a lot  of  subordinate  people  turned  loose  to  go  out  and  get  something. 

Mr.  Carlin.  How  would  you  change  the  phraseology  of  this  resolution  to  meet 
your  view  of  constructive  investigation? 

Mr.  Creigh.  If  you  eliminate  the  name  of  every  packer,  and  investigate  the  indus- 
try on  the  basis  of  trying  to  study  how  the  thing  may  be  stabilized,  so  as  to  prevent 
wide  ranges  or  fluctuations  in  price,  I should  say  that  you  would  be  suggesting  some- 
thing constructive,  in  which  every  packer  and  consumer  and  the  Department  of 
Agriculture  would  cooperate.  I know  of  no  one  in  my  house  who  objects  to  the 
furnishing  of  a syllable  of  information,  when  it  is  clearly  for  the  constructive  side, 
to  try  to  work  the  problem  out. 

Mr.  Carlin.  The  Federal  Trade  Commission  now  has  the  power? 

Mr.  Creigh.  Yes. 

Mr.  Carlin.  It  has  the  power  now  to  require  the  very  thing  that  this  resolution 
requires. 

Mr.  Creigh.  I think  that  is  true.  That  is  one  of  my  arguments  as  to  why  putting 
it  into  this  resolution  is  really  unnecessary,  and  why  it  tips  the  scales  against  us. 

Mr.  Carlin.  The  Trade  Commission  likewise  has  the  power,  of  its  own  motion? 

Mr.  Creigh.  Precisely. 

Mr.  Carlin.  Independent  of  any  complaint? 

Mr.  Creigh.  Precisely. 

Mr.  Carlin.  But  do  you  not  think  it  might  speed  the  matter  a little  to  a quicker 
conclusion  if  we  express  a desire  for  them  to  investigate  this  particular  business? 

Mr.  Creigh.  The  point  I most  keenly  object  to  is  the  mention  of  my  company  by 
name,  coupled  with  a possible  violation  of  the  antitrust  law. 

Mr.  Carlin.  I do  not  think  we  are  interested  in  any  particular  company;  we  are 
interested  in  everybody. 

Mr.  Creigh.  That  is  true. 

Mr.  Carlin.  1 do  not  think  the  mention  of  your  name  here 

Mr.  Creigh  (interposing).  Well,  out  of  the  entire  United  States,  gentlemen,  there 
are  a hundred  other  packers,  some  of  whom  do  not  perhaps  do  the  volume  of  business 
that  we  do— $120,000,000  a year — but  I will  guarantee  that  they  will  do  half  of  it. 

Mr.  Carlin.  Where  is  that?  In  the  United  States  you  say? 

Mr.  Creigh.  Yes;  lots  of  them  that  will  do  half  of  our  business.  Why,  pick  out 
four  or  five  which  have  been  successful  and  stayed  in  the  business? 

Mr.  Carlin.  Who  are  these  others  who  do  a business  half  the  size  of  yours? 

Mr.  Creigh.  I am  not  quite  close  enough  to  have  the  facts  of  other  people’s  busi- 
ness handy,  but  I know  in  the  export  trade  there  are  a number  of  interior  Iowa  packers 
who  do  a very  large  business,  and  the  Indianapolis  packers — Kingan  and  the  Indian- 
apolis Abattoir.  When  you  come  down  to  details  you  catch  me  a little  bit  minus  of 
them,  because  I do  not  come  in  contact  with  the  trade,  but  I know  there  are  a very 
large  number  of  slaughterers  and  packers  who  do  a business  of  many  millions  of  dol- 
lars a year, 

Mr.  Gard.  What  other  branches  has  the  Cudahy  Co.  except  the  slaughtering  of 
meat  animals? 

Mr.  Creigh.  Our  business  would  break  about  this  way:  That  out  of  the  $120,000,000 
a year  we  probably  will  sell  $20,000,000  of  that — of  such  outlying  products  not  derived 
from  meat  animals;  as,  for  instance,  we  will  say,  butter,  eggs,  cheese,  and  poultry 
and  different  products  derived  from  cottonseed  oil,  that  do  not  come  out  of  the  meat 
animals;  then,  a line  of  soap,  of  which  very  little  comes  from  meat  animals;  and  in 
connection  with  that,  cleanser  made  out  of  sand  and  pumice,  and  then  some  phar- 
maceutical products,  which,  in  order  to  justify  a salesman  being  carried  on  the  pay 
roll  to  sell  pepsin  made  in  the  packing  house,  they  will  pick  up  a line  of  pharmaceutical 
articles  to  help  pay  the  expense  of  that  salesman.  There  is  nothing  in  which  we  are 
interested  except  such  as  has  some  connection  with  the  packing-house  business. 

Mr.  Gard.  You  have  $100,000,000  under  the  meat  animal  business  and  $20,000,000 
under  the  other  business? 


464 


MEAT  PACKET. 


Mr.  Creigh.  That  is  the  way  I would  break  it,  roughly,  in  my  own  mind.  Now,  I 
want  to  emphasize  again  with  reference  to  the  general  charges,  that  sometimes  the 
points  of  difficulty  seem  to  be  in  the  Chicago  Union  Stock  Yards  and  with  the  Chicago 
packers,  in  which,  although  we  have  a general  office  there,  we  have  no  packing  house. 
Our  houses  lie  out  on  the  Missouri  River  and  west  of  that.  Now,  we  do  not  have, 
with  one  exception,  any  stockyards  interest.  We  do  own  our  refrigerator  cars,  because 
we  have  to.  For  the  last  two  years  we  have  been  trying  to  get  the  Interstate  Com- 
merce Commission  to  make  some  finding  in  a case  under  submission  that  will  protect 
us  for  some  decent  return  on  the  investment  in  those  cars. 

I think  I have  taken  up  even  more  than  the  10  minutes  which  I promised,  and  in 
conclusion  I want  to  say  that  I noticed  at  one  point  in  the  testimony  of  one  of  the 
previous  hearings  the  statement  of  some  witness  with  reference  to  a so-called  split 
sale  between  our  people  at  Kansas  City,  and,  I think  it  was,  the  Morris  people,  and  I 
would  like  to  offer  as  an  exhibit  an  affidavit  of  our  chief  cattle  buyer— I will  turn  over 
a copy  of  it  to  Mr.  Fisher  [handing  paper  to  Mr.  Fisher]  in  which  he  states  that  he  has 
never  made  any  such  split  purchase  as  that. 

Mr.  Gard.  Where  was  that  split  sale? 

Mr.  Creigh.  At  Kansas  City.  He  says  that  he  does  recall  that  at  one  time  in  the 
yards  at  the  date  of  the  instance  that  was  cited,  where  some  shipper  had  cattle  in  the 
hands  of  one  commission  company,  and  they  were  in  two  pens;  that  he  made  a bid 
of  $7.75  per  hundredweight  for  all  the  cattle,  and  finally  all  that  he  did  purchase  was 
one  pen  containing  43  cattle,  and  that  due  to  the  fact  that  he  bought  the  small  quan- 
tity he  paid  $7.85  for  them. 

(The  affidavit  above  mentioned  appears  in  full  below,  as  follows:) 

‘ 1 AFFIDAVIT  OF  T.  J.  HOGAN  RELATIVE  TO  THE  PURCHASE  OF  CERTAIN  CATTLE  BY  HIM 
FOR  THE  CUDAHY  PACKING  CO.  AT  KANSAS  CITY  ON  JANUARY  10,  1916. 

‘'State  of  Kansas, 

‘ ‘ County  of  Wyandotte , ss: 

“T.  J.  Hogan,  of  lawful  age,  being  duly  sworn,  on  his  oath,  deposes  and  says: 

“That  he  resides  at  3300  Coleman  Road,  in  Kansas  City,  Jackson  County,  Mo.,  and 
is  employed  by  the  Cudahy  Tacking  Co.  as  its  head  cattle  buyer  at  Kansas  City  and 
has  been  so  employed  for  nine  years  last  past. 

“That  in  the  daily  course  of  his  business  affiant,  whose  office  is  in  the  Exchange 
Building  at  the  stockvards  in  Kansas  City,  Mo.,  goes  out  over  the  yards  each  morning 
for  the  purpose  of  viewing  the  cattle  therein  contained,  with  the  object  of  buying- 
certain  numbers  of  cattle  of  certain  classes  to  meet  his  daily  requirements,  and  that, 
pursuant  to  his  general  course  of  his  employment,  on  Monday,  the  10th  day  of  January, 
A.  E.  1010,  while  inspecting  and  viewing  the  cattle  at  the  stockyards  in  Kansas  City 
he  found  two  adjoining  pens  of  cattle  in  the  section  of  the  stockyards  alotted  to  the 
Drumm  Commission  Co.,  in  each  of  which  pens  there  wrere  ic  'cattle,  E.  IIoux  being 
the  salesman  in  charge  of  said  cattle  for  the  Drumm  Commission  Co.,  and  affiant 
talked  with  said  Houx  in  regard  to  the  purchase  of  said  cattle. 

“These  cattle  were  wdiat  is  known  as  fat  corn-fed  westerns  and  were  not  of  the  class 
of  cattle  that  affiant  desired  to  purchase  a very  large  number  of  on  that  day,  but 
affiant,  to  the  best  of  his  recollection,  did  make  a bid  of  ? 7.75  per  hundredweight  for 
the  cattle  and  would  have  been  willing  to  have  purchased  the  entire  two  pens  of  cattle 
could  thev  have  been  bought  at  that  price,  but  the  said  salesman  refused  to  sell  on  that 
basis.  Finally,  in  the  course  of  the  dealing,  however,  affiant  did  purchase  one  pen 
containing  43  of  the  cattle,  weighing  a total  of  53,340  pounds,  at  and  for  the  price  of 
$7.85 per  hundredweight  and  affiant  did  not  purchase  orofier  to  purchase  or  have  any 
further  dealings  concerning  the  cattle  in  the  other  pen  above  mentioned. 

“Affiant  further  says  that  recently  this  matter  was  called  to  his  attention  and  that  in 
order  to  determine  what  disposition  was  made  of  the  43  cattle  in  the  adjoining  pen  above 
referred  to  by  the  Drumm  Commission  Go.,  he  inspected  and  investigated  the  records 
in  the  office  of  the  Kansas  City  Stock  Yards  Co.  and  also  the  office  of  the  Drumm 
Commission  Co.,  and  from  said  records  found  that  on  the  10th  of  January,  19.1 6,  Morris  & 
Co.  purchased  the  other  pen  of  43  cattle,  which  weighed  63,190  pounds,  at  and  for  the 
price  of  $7.85  per  hundredweight. 

“Affiant  further  says  that  in  the  purchase  of  said  43  cattle,  which  he  purchased  for 
Cudahy  Packing  Co.,  there  was  no  collusion  nor  connivance  between  affiant  and  the 
buyer  for  Morris  & Co.;  that  he  did  not  have  any  conversation  with  the  buyer  for 
Morris  & Co.,  nor  any  person  connected  with  said  company,  regarding  the  purchase  or 
sale  of  said  cattle,  and  that  the  only  dealings  he  had  with  any  person  concerning  the 
43  cattle  which  he  purchased  vas  had  with  E.  Houx  above  referred  to,  who  is  now  and 


MEAT  PACKER. 


465 


has  been  for  some  time  last  past  employed  by  the  Drumm  Commission  Co.  as  head 
salesman,  and  who  has,  so  far  as  affiant  has  any  knowledge,  no  connection  of  any  kind 
whatsoever  with  Morris  & Co. 

“T.  J.  Hogan. 

“Subscribed  in  my  presence  and  sworn  to  before  me  this  13th  day  of  May,  1916, 

“[seal.]  “Winnie  Case, 

“ Notary  Public. 

“My  commission  expires  June  25,  1917.” 

Mr.  Morgan.  Are  there  any  other  witnesses  ? 

The  Chairman.  Are  there  any  further  questions  to  be  asked  of 
Mr.  Creigh  ? If  not,  we  will  hear  you,  Mr.  Marsh. 

STATEMENT  OF  ME.  BENJAMIN  C.  MAESH,  EEPEESENTING 

THE  FAKMEES’  NATIONAL  COUNCIL  AND  THE  PEOPLE’S 

EECONSTEUCTION  LEAGUE,  BLISS  BUILDING,  WASHING- 
TON, D.  C. — Eesumed. 

Mr.  Marsh.  I want  to  make  a few  statements,  Mr.  Chairman,  in 
regard  to  the  Williams  bill  which  was  introduced  since  I appeared 
before  you  Tuedsay,  and  also  to  answer  some  of  the  criticisms  of  the 
Haugen  bill — -the  chairman’s  bill — by  some  of  the  people  who  have 
appeared  to-day. 

I would  like,  Mr.  Chairman,  to  address  myself  first  to  what  is  known 
as  the  Williams  bill,  introduced  on  May  3,  and  I regret  that  the  intro- 
ducer is  not  present,  but  I mentioned  to  him  as  he  was  leaving  the 
room  a short  while  ago  that  I wanted  to  discuss  this  bill  and  some  of 
the  features  of  it,  and  he  told  me  that  the  bill  was  presented  to  him 
by  the  American  Farm  Bureau  Federation,  and  so  Mr.  Gray  Silver,  the 
Washington  representative  of  the  American  Farm  Bureau,  told  me. 

May  I go  through  this  bill  section  by  section  ? 

The  Chairman.  Proceed  in  your  own  way,  Mr.  Marsh. 

Mr.  Marsh.  On  the  first  page  of  the  Williams  bill,  H.  It.  5692,  you 
will  find  that  there  is  a brief  change  in  that,  but  a change  of  very 
great  importance.  That  bill  entirely  omits  the  definition  of  “live- 
stock products”  of  the  Haugen  bill  and  substitutes  therefor  at  the 
top  of  page  2 the  following  statement : 

The  term  “meat  food  products”  means  all  edible  products  and  by-products  of  the 
slaughtering  and  meat-packing  industry. 

Now,  the  Haugen  bill,  page  1,  line  11  and  following,  includes  “live- 
stock products,”  and  so  defines  them.  It  says: 

The  term  “live-stock  products”  means  all  products  and  by-products  of  the  slaugh- 
tering and  meat-packing  industry  derived  in  whole  or  in  part  from  live  stock. 

Now,  as  I understand  the  difference  it  would  be  this,  that  under  the 
Williams  bill — or  perhaps  I had  better  more  accurately  refer  to  it  as 
the  Farm  Bureau  Federation  bill — some  of  the  products  handled  by 
the  packers,  or  which  they  have  handled,  would  be  excluded  from  the 
provision  and  regulation  provided  for  in  the  Haugen  bill. 

Now,  the  Federal  Trade  Commission,  in  its  summary  of  the  meat- 
packing industry,  on  page  14,  says — and  I will  quote  it  briefly,  if  I 
may,  Mr.  Chairman: 

Fertilizers:  The  fertilizer  industry  lies  at  the  base  of  American  food  production. 
The  packers,  controlling  the  disposal  of  more  than  two-thirds  of  the  offal  produced 
in  the  packing  industry,  have  become  the  most  important  factors  in  the  manufacture 
of  animal  fertilizer  ingredients  and  have  strongly  entered  the  field  of  production  of 
mineral  ingredients.  In  mixed  fertilizers  they  produce  19  per  cent  of  the  total. 

46985—21 30 


466 


MEAT  PACKER. 


I would  comment  that  those  fertilizers  in  that  form  are  not  edible 
products. 

Now,  I go  on  to  what  the  Trade  Commission  has  to  say  as  to 
hides,  leather,  and  wool: 

Hides,  leather,  and  wool:  In  addition  to  the  far-reaching  ownership  and  control  in 
the  various  branches  of  the  food  industry  outlined  above,  the  Big  Five  also  occupy  an 
important  position  with  reference  to  the  clothing  of  our  civil  and  military  population 
through  potential  control  of  the  hide  and  leather  markets  of  the  United  States  and  of  a 
considerable  proportion  of  the  total  wool  production. 

There  is  no  question  of  their  dominant  position  with  reference  to  hides  and  leather. 
The  Big  Five  not  only  handle  more  than  three-fourths  of  the  hides  and  skins  pro- 
duced by  interstate  slaughterers,  but  directly, . through  their  subsidiaries,  or  through 
leases  and  contracts,  tan  a large  part  of  the  leather  produced  in  the  United  States. 
The  big  packers  occupy  an  even  more  important  and  profitable  position  in  the  hide 
and  leather  industry  than  these  statements  indicate,  because  of  the  fact  that  their 
hides  receive  a higher  grading  than  those  of  independent  packers  and  butchers,  whose 
hides  are  arbitrarily  classed  as  “country  hides,”  and  that  they  control  a large  share 
of  hide  imports. 

Finally,  the  packers  ’ storage  facilities  and  strong  financial  position  make  it  possible 
for  them  to  manipulate  the  markets  and  dispose  of  their  product  without  regard  to 
supply  and  demand.  It  is  admitted  in  correspondence  of  the  big  packers  that  during 
the  past  year,  when  leather  was  in  enormous  demand,  certain  of  the  Big  Five  hoarded 
hides  in  such  immense  quantities  for  the  purpose  of  inflating  the  already  unreasonable 
prices  that  (to  quote  their  own  correspondence):  “We  are  forced  to  pack  them  in  our  , 
cellars  and  outside  in  the  open,  but  have  reached  the  point  now  where  we  have  no  , 
place  to  go  with  any  more.  ’ ’ 

Now,  Mr.  Chairman,  it  seems  very  strange  that  any  farmer  organi- 
zation would  suggest  eliminating  these  nonedible  products  and  mak-  , 
ing  such  a vital  change  in  a bill  as  this,  unless  it  be  upon  the  assump-  * 
tion  that  we  are  going  to  be  governed  by  a court  decree. 

Well,  if  we  are,  in  this  packers’  industry,  to  be  governed  by  court 
decree,  there  is  no  use  for  any  legislation,  as  far  as  I can  see.  There- 
fore, if  we  have  legislation  it  is  certainly  very  inadvisable  to  exclude  , 
any  of  the  products  which  the  packers  handle,  and  of  course  there  ' 
are  a great  many  others  which  they  handle.  I don’t  want  to  go  into  ) 
a great  long  list  of  them.  The  Federal  Trade  Commission  has  sub-  i 
mitted  a long  list.  But  the  fertilizers  and  the  hides,  to  say  nothing 
about  the  other  lines  of  packers  in  which  they  seek  to  conceal  their 
high  profits,  are  certainly  things  which  the  Government  ought  to  i 
control. 

Mr.  Aswell.  Under  the  Haugen  bill,  do  you  understand  that  that 
would  include  shoes  and  woolen  clothes  ? 

Mr.  Marsh.  I understand  that  under  the  Haugen  bill  it  would 
include  all  of  those;  yes.  It  means  all  products  and  by-products  of 
the  meat-packing  industry  in  which  the  packers  are  engaged.  The 
words  are: 

The  term  ‘ ‘ live-stock  products  ’ ’ means  all  products  and  by-products  of  the  slaughter- 
ing and  meat-packing  industry  derived  in  whole  or  in  part  from  live  stock. 

Mr.  Aswell.  That  includes  the  shoe  industry  ? 

Mr.  Marsh.  If  they  go  into  the  shoe  industry,  if  they  engage  in  the 
shoe  industry,  it  would  include  that. 

Mr.  Aswell.  Do  you  think  it  would  be  confined  to  the  packers  ? 

Mr.  Marsh.  I think  it  would  under  this  definition,  assuming,  of 
course,  that  they  have  a certain  per  cent  of  interest  in  shoe  manu- 
facturing, as  provided  in  the  Haugen  bill;  they  would  be  included 
in  that. 

Mr.  Aswell.  The  control,  then,  would  follow  the  by-product  as- 
long  as  the  packer  has  anything  to  do  with  it  ? 


MEAT  PACKER. 


467 


Mr.  Marsh.  The  control  would  follow  the  by-product  as  long 
as  the  packer  has  control  of  it;  that  is  what  I understand  to  be  the 
meaning  of  it. 

Mr.  Aswell.  I wanted  to  be  certain  of  the  language.  I don  t 
see  that  the  language  indicates  that. 

Mr.  Marsh.  That  is  how  I construe  it. 

Mr.  Lightfoot.  Mr.  Marsh,  one  moment.  Just  for  your  informa- 
tion, I want  to  say  that  I think  your  construction  of  the  language 
there  is  wrong. 

Mr.  Marsh.  My  construction  of  the  language  of  which  bill,  11  you 

please  ? _ . , 

Mr.  Lightfoot.  Of  the  amendment  you  are  speaking  ol. 

Mr.  Marsh.  You  mean  of  the  Williams  bill? 

Mr.  Lightfoot.  Yes.  Mr.  Wilson  had  a similar  suggestion  that 
he  made  this  morning,  and  I am  familiar  with  it,  and  just  for  your 
information  I should  desire  to  call  your  attention  to  this  fact:  Our 
construction  of  that  is  this,  that  the  definition  of  the  term  1 live 
stock”  means  live  or  dead  animals,  or  cattle,  sheep,  swine,  or  goats. 
Now,  that  language  will  cover  every  packer.  That  gives  the  Secre- 
tary of  Agriculture  supervision  over  all  of  the  activities  of  the  packer, 
regardless  of  his  by-products.  None  of  the  activities  of  the  packer, 
in  handling  any  of  his  product,  whether  it  is  the  meat,  or  whether 
it  is  the  by-product,  or  whether  it  is  fertilizer — if  he  was  making 
fertilizer — would  be  excluded  from  the  terms  of  that  act. 

But  any  person,  outside  of  a packer,  who  would  be  maKing  fertilizer, 
under  the  language  as  it  is  now  in  the  Haugen  bill,  would  be  brought 
in;  it  would  bring  him  in  if  he  was  using  any  by-product  from  the 
slaughter  of  animals  in  his  business.  It  would  make  a packer  out 
of  the  American  Woolen  Mills,  because  they  are  using  raw  wool  in 
their  spinning  operations.  So  that  it  was  our  idea  that  the  bill 
ought  not  to  extend  or  be  permitted  to  extend  to  or  include  every 
kind  of  a manufacturing  operation  in  this  country  which  employs 
in  its  business  any  by-product  derived  from  the  slaughter  of  animals. 

But  I don’t  think  that  that  would  exclude  at  all  the  operations  ol 
the  packers  themselves  in  the  manufacture  and  handling  of  any  of 
their  by-products,  because  the  bill  applies  to  any  man  who  ‘‘slaughters 
live  stock.”  That  would  get  the  packer  in  all  of  his  operations. 

Now  then,  another  reason  is  this,  which  I think  would  be  proper  to 
explain:  There  are  a great  many  people  in  this  country  who  manu- 
facture food  products,  say  sausage  and  things  of  that  kind,  who  do 
not  slaughter  an  animal.  Well,  such  a person  would  not  be  a packer 
and  would  not  come  under  the  terms  of  this  bill,  under  the  definition 
of  “live  stock,”  because  he  is  not  engaged  in  slaughtering  them  at  all. 
But  he  is  engaged  in  manufacturing  them. 

Now  subdivision  (6),  with  that  definition  there,  “of  manufacturing 
or  preparing  meats  or  meat  food  products  for  sale  or  shipment,” 
would  bring  in  all  those  in  that  class.  So  it  would  bring  a packer  in 
who  slaughters  live  stock,  and  it  would  apply  to  the  manufacture  of 
edible  food  products,  if  they  don’t  slaughter  them. 

Now,  there  are  quite  a number  of  packers  who  do  a pretty  big 
business  who  do  not  slaughter  at  all.  They  have  that  done  for  them 
or  they  buy  the  meat  for  the  manufacture  of  food  products.  And  I 
think  that  if  you  are  under  the  impression  that  that  bill  would  exclude 
the  jurisdiction  of  the  Secretary  of  Agriculture  over  the  by-products 


468 


MEAT  PACKER. 


or  the  manufacture  of  by-products  or  handling  of  them  by  a packer, 
you  are  mistaken.  It  is  not  our  idea,  and  we  don’t  want  it  if  it  does. 

Mr.  Marsh.  Well,  may  I ask  you,  Mr.  Lightfoot,  this  question: 
Do  I understand  that  you  collaborated  with  the  Farm  Bureau  Federa- 
tion in  preparing  this  bill  ? 

Mr.  Lightfoot.  No,  sir;  I did  not  collaborate  with  anybody. 
Mr.  Wilson  stated  this  morning  that  he  had  a discussion  with  Mr. 
Howard  in  Chicago.  There  were  several  conferences  of  farmers  out 
there,  and  they  have  been  for  some  time  trying  to  find  out  what 
objection  the  packers  had  to  what  they  considered  reasonably  con- 
structive bill,  along  the  line  as  the  Haugen  bill,  and  I think  Mr.  Wilson 
has  very  frankly  indicated — as  he  did  here  this  morning — to  him 
some  of  the  objections.  But  I find  that  in  reading  the  Williams  bill 
that  the  Farm  Bureau  have  not  in  their  amendments  included  all  of 
the  objections  to  the  bill  that  Mr.  Wilson  had  suggested.  They,  I 
think,  have  adopted  some  of  the  ideas,  in  their  efforts,  if  they  had 
anything  to  do  with  the  preparation  of  the  bill. 

Mr.  Marsh.  Well,  may  I ask,  as  Gen.  Lightfoot  has  given  infor- 
mation on  this  question,  Is  it  your  thought  that  more  than  the  , 
business  known  as  meat  packing,  or  included  in  the  Haugen  bill, 
should  be  brought  under  the  control  of  the  Secretary  of  Agriculture,  ' 
and  it  is  for  that  reason  that  you  specify  the  words  “ edible  products  : 
and  by-products”  in  defining  “ meat-food  products”  and  do  not  ! 
accept  the  other  definitions  ? 

Mr.  Lightfoot.  I think  that  in  the  general  discussions  had  out  in 
Chicago  on  that  thing  that  the  farmers  said  that  the  word  “ edible”  ? 
there  was  intended  to  eliminate  such  a thing  as  leather  or  a shoe 
manufacturer  or  a tanner.  Tanneries  are  not  under  this  bill,  except  ' 
to  the  extent  that  a packer  might  own  a tannery. 

Now,  if  a packer  does  own  a tannery  and  he  is  manufacturing  his  * 
leather  out  of  his  hides,  why  the  Secretary  of  Agriculture  can  in-  : 
vestigate  all  the  lines  of  business  that  he  is  in.  The  ownership  of  ] 
this  business,  and  every  fact  is  connection  with  the  parent  company,  ) 
and  every  subsidiary — whatever  by-product  he  is  handling.  But  if  j 
you  don’t  put  some  such  statement  as  that  in  it — and  I think  the  ; 
Senate  over  there  the  other  day  in  considering  the  matter  has  limited 
that  to  food  products,  has  used  the  words  “to  prepare  for  human 
food,”  or  something  of  that  kind — in  order  to  have  some  definite 
line,  why  the  language  as  it  was  would  make  a packer  out  of  a man 
who  was  engaged  in  making  hair  brushes  or  automobile  cushions, 
or  spinning  yarn,  and  it  would  reach  out  and  bring  in  every  industry 
in  this  country,  which  is  not  contemplated  by  those  who  desire 
legislation  to  supervise  the  industry  under  this  particular  legislation. 
They  want  to  supervise  the  packers  and  all  of  their  operations  and 
whatever  they  are  doing.  Now,  I think,  from  my  construction  that 
the  definition  of  Hive  stock”  as  it  now  appears  would  include  the 
packers  and  all  their  operations.  Now,  the  other  definition  of  “meat 
food  products”  changes  it  a little  to  eliminate  these  outside  fellows 
that  are  not  packers,  and  which  are  not  connected  with  the  packing 
industry  in  any  sense. 

Mr.  Ten  Eyck.  Do  you  know,  Mr.  Lightfoot,  whether  this  ad- 
ditional paragraph  was  suggested  by  Mr.  Wilson  or  the  farmers 
themselves,  the  farmers  or  the  representative? 


MEAT  PACKER. 


469 


Mr.  Lightfoot.  Well,  I don’t  know  about  that.  I know  that 
Mr.  Wilson  in  his  discussions  out  there  very  frankly  discussed  all  the 
objections  that  he  had  to  this  bill. 

Mr.  Ten  Eyck.  But  you  don’t  know  whether  that  came  direct 
from  the  farmers,  from  Wilson,  or  from  the  packers?  It  would  be 
immaterial  in  a way.  I was  just  trying  to  find  out  which  one  had 
the  thought  of  putting  it  in,  that  was  all. 

Mr.  Lightfoot.  Well,  I will  tell  you,  the  objection  was  made  to 
the  Gronna  bill  on  the  same  line  by  a lot  of  people,  by  a lot  of  indus- 
tries, and  they  wired  in  and  sent  in  messages  and  things  of  that 
kind,  and  just  who  originated  the  thought  of  eliminating  that, 
whether  it  originated  from  the  farmers  or  the  packers,  I don’t  know, 
but  it  is  immaterial  to  the  packer,  because  we  are  under  it.  It 
doesn’t  help  us  whatever.  But  I think  there  was  some  idea  that 
the  other  people  ought  not  to  be  brought  in  in  the  same  bill ; that  is 
all. 

Mr.  Marsh.  I am  not  convinced  by  your  statement,  but  it  is  a 
statement  which  I appreciate.  I don’t  think  it  meets  the  situation, 
and  I think  when  the  full  discussion  was  up  in  the  Senate  it  was 
adopted  practically  with  the  definition  in  the  Haugen  bill. 

Then  on  page  4 of  the  Williams  bill,  section  203  reads: 

That  it  shall  be  unlawful  for  any  packer  with  the  effect  of  unduly  restraining  com- 
merce or  of  creating  a monopoly  to— 

(a)  Engage  in  or  use  any  unfair,  unjustly  discriminatory,  or  deceptive  practice  or 
device  in  commerce; 

and  then  (b),  (c),  (d),  (e),  (f),  and  (g)  follow. 

Now  it  seemed  to  us  very  unwise  to  attempt  to  put  into  legisla- 
tion any  seeming  indorsement  of  restraining  commerce  and  attempt- 
ing to  say  that  anything  which  does  not  unduly  restrain  commerce 
is  reasonable,  and  it  appears  to  us  that  that  is  the  purport  and  effect 
and  intention  of  this  clause.  I don’t  know  why  it  should  be  used. 

The  Haugen  bill  is  very  distinct.  It  says:  “It  shall  be  unlawful 
for  any  packer  to”  engage  in  or  indulge  in  any  of  the  destructive 
practices  enumerated. 

It  seems  to  me  the  Williams  bill  amendment  cannot  meet  the 
situation. 

On  page  9 of  the  Williams  bill,  there  is  a rather  interesting  omis- 
mion.  The  Haugen  bill,  page  9,  paragraph  (h),  line  4,  reads:  “The 
issue  of  such  writ  shall  not  operate  as  a stay  of  the  decree  of  the  cir- 
cuit court  of  appeals,  in  so  far  as  such  decree  operates  as  an  in- 
junction, ” while  that  is  stricken  out  in  the  Williams  bill.  I can  not 
imagine  what  would  be  the  legitimate  purpose  of  that.  Perhaps 
the  gentleman  who  drafted  the  bill  could  explain  it.  It  would 
appear  as  though  it  would  prevent  any  effective  action  on  the  part 
of  the  regulating  power,  or  immediate  action,  if  you  omit  that. 

Mr.  Sinclair.  Where  is  that  in  the  Haugen  bill? 

Mr.  Marsh.  In  both  the  Haugen  and  Williams  bills  it  is  on  page 
9.  I will  read  the  Williams  bill  and  then  show  the  difference.  The. 
Williams  bill  reads : 

The  circuit  court  of  appeals  shall  have  exclusive  jurisdiction  to  review,  and  to 
set  aside  or  modify,  such  orders  of  the  Secretary,  and  the  decree  of  such  court  shall 
be  final  except  that  it  shall  be  subject  to  review  by  the  Supreme  Court  of  the  United 
States  upon  certiorari,  as  provided  in  section  240  of  the  Judicial  Code,  if  such  writ 
is  duly  applied  for  within  60  days  after  entry  of  the  decree. 


470 


MEAT  PACKER. 


There  stops  the  Williams  bill,  while  the  Haugen  bill  continues: 

The  issue  of  such  writ  shall  not  operate  as  a stay  of  the  decree  of  the  circuit  court  of 
appeals,  in  so  far  as  such  decree  operates  as  an  injunction. 

In  other  words,  while  there  may  be  an  appeal,  as  we  understand, 
under  the  Haugen  hill  the  issue  of  the  writ  of  the  circuit  court  of 
appeals  is  not  going  to  be  interfered  with  pending  an  appeal.  That 
is  the  construction  we  put  on  it,  and  we  do  not  know  why  there  should 
be  any  interference  with  the  injunction  going  into  force  as  soon  as 
it  is  issued. 

On  page  10  of  the  Williams  bill,  line  18,  the  bill  reads: 

Whenever  the  Secretary  finds  that  the  accounts,  records,  and  memoranda  of  any 
packer  do  not  fully  and  correctly  disclose  all  transactions  involved  in  his  business, 
the  Secretary  may  prescribe  the  manner  and  form  in  which  such  accounts,  records, 
and  memoranda  shall  be  kept,  and  thereafter  any  packer  who  fails  to  keep  such 
accounts,  records,  and  memoranda  in  the  manner  and  form  prescribed  or  approved  by 
the  Secretary  shall  upon  conviction  be  fined  not  more  than  $5,000,  or  imprisoned  not 
more  than  three  years,  or  both. 

Now,  the  Haugen  bill  is  very  different,  a little  change  of  words  to 
which  I will  call  attention,  in  line  21,  on  page  10.  It  starts  at  line  1, 
just  as  the  Williams  bill,  but  it  says,  line  21 — 

And  thereafter  any  packer  who  keeps  any  other  or  different  accounts. 

Now,  the  purport  of  the  Haugen  bill,  as  we  understand  it,  is  to  ; 
prevent  the  packers  from  keeping  their  own  private  records  and 
keeping  themselves  advised  of  those  things  which  the  public  can  not 
know,  so  as  to  form  this  collusion  in  purchasing,  etc.,  which  was  1 
established  by  the  Federal  Trade  Commission;  while  the  Williams 
bill  does  not  prohibit  them  from  keeping  any  such  private  books, 
records,  or  memoranda.  It  merely  says  that  they  must  not  fail  to 
keep  those  prescribed  by  the  Secretary  of  Agriculture. 

In  other  words,  the  Haugen  bill  confines  their  accounting  to  a • 
uniform  accounting  system  and  does  not  let  them  keep  any  other  j 
or  a double  set  of  books  or  accounts  as  in  the  case  oi  the  “ Black  j 
Book”  and  other  revelations  of  the  Federal  Trade  Commission.  ; 
They  are  all  to  be  made  public. 

Now,  that  is  of  very  great  importance.  As  you  will  remember,  i 
Mr.  Chairman  and  gentlemen  of  tne  committee,  in  my  statement  on 
Tuesday  we  urged  that  the  chairman’s  bill  should  be  amended  from 
the  beginning  so  that  as  soon  as  this  bill  goes  into  effect  the  Secretary 
of  Agriculture,  or  whatever  authority  is  in  charge  of  the  regulation, 
shall  require  the  packers  to  institute  a uniform  system  of  accounting 
and  forbid  their  using  any  other  record  or  memorandum.  Let  us 
have  the  thing  on  the  level  and  above  board,  so  we  will  know  what 
we  are  doing.  I am  going,  before  I get  through,  to  go  into  a little 
more  detail  on  what  they  have  done,  and  why  they  have  done  it, 
and  to  meet  some  of  the  objections  they  are  making.  This  bears 
on  it. 

On  page  17  of  the  Williams  bill  there  is  a new  section  I would 
imagine  that  this  would  be  one  of  the  recemmendations  of  the  packers. 
New  section  (i)  reads: 

Any  stockyard  owner,  market  agency,  or  other  dealer  may  appeal  from  any  order, 
rule,  regulation,  or  action  of  the  Secretary,  in  which  case  the  procedure  shall  be  as 
provided  in  sections  204,  205,  and  206,  title  2 of  this  act,  and  no  penalty  shall  accrue 
n such  case  until  said  order,  rule,  regulation,  or  action  shall  become  final  and  is 
thereafter  violated. 


MEAT  PACKER. 


471 


Now,  Mr.  Chairman,  it  is  a mysterious  thing  that  an  organization 
purporting  to  represent  any  American  farmers  should  try  to  give 
the  packers  freedom  to  enable  them  to  escape  the  penalty  for  a 
violation  of  any  order,  rule,  regulation,  or  action  of  the  Secretary, 
or  for  any  malfeasance,  until  they  thereafter  violate  this  order. 

Now,  if  they  have  violated  an  order,  they  should  be  punished. 
I do  not  see  why  they  should  be  whitewashed.  That  section  (i)  is 
not  in  your  bill. 

Mr.  Creigh.  Do  you  think  the  Haugen  bill  would  be  constitutional 
without  the  court  of  appeals  section  ? 

Mr.  Marsh.  I do  not  know  whether  it  is  constitutional  or  not. 
But  to  say  that  a misdemeanor,  or  a crime,  or  criminal  shall  not  be 
punished  for  what  he  has  done  until  he  does  it  again — - — 

Mr.  Creigh  (interposing).  The  first  time  reading  this,  I should 
imagine  that  is  not  the  correct  impression  of  the  language. 

Mr.  Marsh.  Let  me  read  this.  What  does  this  mean  ? I am  not 
a lawyer,  you  know. 

No  penalty  shall  accrue  in  such  case  until  said  order,  rule,  regulation,  or  action 
shall  become  final  and  is  thereafter  violated. 

Now,  suppose  you  say  no  person  convicted  of  murder  shall  be 
penalized  until  he  commits  murder  again,  would  that  be  consti- 
tutional ? I don't  know;  I hope  not. 

Mr.  Silver.  I had  not  intended  to  say  anything  until  I was  on  the 
stand,  at  which  time  I will  take  up  this  bill  and  discuss  it;  but  at  that 
particular  place,  it  was  my  expectation  and  intention  to  ask  that  that 
line  be  stricken  out.  It  was  not  intended  to  be  there.  But  I do  not 
want  to  enter  this  discussion  until  my  turn  comes  on  the  stand. 

Mr.  Marsh.  I would  like  to  ask  how  that  came  to  be  in  there  ? 

Mr.  Kincheloe.  Let  me  ask  what  the  American  Farm  Bureau 
Federation  means  to  you  ; do  you  think  there  is  a conspiracy  between 
them  and  the  packers  ? 

Mr.  Silver.  I have  certain  information  which  I will  present  later. 
I ask  you  if  one  of  reasonable  integrity 

Mr.  Kincheloe  (interposing).  I am  asking  you:  Do  you  think 
that  the  American  Farm  Bureau  Federation  is  in  collusion  with  the 
packers  ? 

Mr.  Marsh.  I understand  they  have  been  in  conference  with  the 
packers,  whether  they  are  in  collusion  or  not.  Mr.  Howard  is  getting 
$15,000  a year,  and  Mr.  Silver  is  getting  $12,000  a year,  and  Mr. 
Howard  stated  before  a House  committee  that  he  was  “ unsophisti- 
cated.” 

Mr.  Kincheloe.  How  much  are  they  paying  you  ? 

Mr.  Marsh.  $3,600  a year  for  what  I am  doing. 

Mr.  Kincheloe.  I know  of  the  farm  bureaus  in  my  State,  and  they 
are  made  up  of  the  very  highest  class  and  most  intelligent  men  in  their 
communities. 

Mr.  Ten  Eyck.  Do  you  know  personally  of  the  membership  of  the 
American  Farm  Bureau  Federation? 

Mr.  Marsh.  It  is  made  up  of  a good  many  farmers  and  some 
bankers.  That  came  out  in  the  Committee  on  Banking  and  Currency 
in  the  Senate  some  time  ago.  Mr.  Silver  stated  that  it  was  organized 
in  New  York. 

Mr.  Ten  Eyck.  Do  you  mean  New  York  State  or  New  York  City? 


472 


MEAT  PACKER. 


Mr.  Marsh.  I don’t  know;  nor  whether  you  refer  to  the  Broome 
County  organization  or  not.  Mr.  Silver’s  reference  was  to  1919, 
because  he  stated  the  next  year  they  met  in  Chicago  and  organized. 
Mr.  Silver  stated  he  would  put  in  the  record  a list  of  those  present 
at  the  New  York  meeting,  but  it  doesn’t  appear. 

Mr.  Ten  Eyck.  The  Broome  County  organization  was  in  1914. 

Mr.  Marsh.  Mr.  Silver  can  give  you  that  information  as  to  who 
was  there  when  he  is  on  the  stand. 

Mr.  Kincheloe.  Do  we  understand  there  is  a rivalry  or  bad  feeling 
betwen  your  organization  and  the  members  of  the  American  Farm 
Bureau  Federation? 

Mr.  Marsh.  Not  the  least;  but  we  certainly  would  not  be  doing 
our  duty  to  the  National  Farmers’  Council  and  to  the  People’s  Recon- 
struction League,  whom  we  represent,  if  we  did  not  point  out  these 
things  in  this  bill. 

Mr.  Kincheloe.  You  have  a right  to  point  them  out,  we  invite 
that;  but  the  reason  I interrupted  you,  you  seemed  to  think  that  the 
American  Farm  Bureau  Federation  is  in  collusion  with  the  packers. 

Mr.  Ten  Eyck.  I want  to  make  a statement  here.  I helped  to 
form  the  Farm  Bureau  of  Albany  County.  I was  secretary  and 
treasurer  of  it  for  a long  time,  and  know  what  their  desires  are.  I 
also  helped  to  form  the  New  York  Farm  Bureau,  and  was  a delegate 
to  Chicago  at  the  convention  which  formed  the  American  Farm 
Bureau  Federation.  I was  there  the  day  Mr.  Howard  was  elected. 
I know  of  no  better  bunch  of  farmers  anywhere  than  those  who  met 
first  at  Albany,  and  then  in  New  York  State,  and  then  at  Chicago. 

Mr.  Marsh.  I will  quite  agree  with  you  that  the  farmer  members 
of  the  American  Farm  Bureau  Federation  want  to  do  the  right  thing, 
and  you  will  agree  with  me  that  any  of  their  real  representatives 
would  certainly  not  have  written  a provision  like  that. 

Mr.  Ten  Eyck.  As  Mr.  Silver  said,  it  was  a mistake,  and  he  in- 
tended to  have  it  cut  out.  I am  not  representing  the  farmers  or 
anybody  else  particularly  here,  but  I want  a bill  that  will  represent 
the  people  of  the  entire  country.  I do  feel  that  the  members  of  the 
American  Farm  Bureau  Federation,  with  their  officers,  are  honest 
and  trustworthy  and  are  attempting  to  obtain  the  best  for  the  people 
they  represent. 

Mr.  Marsh.  They  did  make  a very  serious  error  in  judgment  when 
the  indorsed  the  Cummins-Esch  law,  which  has  cost  the  farmers  a 
billion  dollars  and  put  the  country  on  the  blink  from  one  end  of  the 
country  to  the  other. 

Mr.  Kincheloe.  That  is  why  I asked  you  if  you  are  talking  of  the 
men  who  make  up  these  farm  federations  throughout  the  country. 
I happen  to  know  many  of  the  men  who  are  in  the  farm  federations  in 
the  State  of  Kentucky  and  I know  the  conditions  they  are  working 
under  and  I know  they  are  men  of  the  highest  class  and  standing, 
and  if  you  are  talking  about  that  sort  of  organization  I,  as  a menber  of 
Congress,  represent  them. 

Mr.  Marsh.  I am  talking  about  these  officers. 

Mr.  Kincheloe.  I am  not  talking  about  the  persons  getting  the 
salaries  or  about  your  petty  jealousies  or  about  those  who  are  at  the 
head  of  it.  That  does  not  interest  me. 

Mr.  Marsh.  I think  the  terms  of  the  bill  do  interest  you  as  they 
do  me. 


MEAT  PACKER. 


473 


'Mr.  Kincheloe.  I am  going  to  reserve  my  judgment  on  the  bill, 
regardless  of  what  you  say,  or  the  other  Representatives  say.  The 
point  I am  getting  at  is  that  you  would  have  us  believe  that  the 
American  Farm  Bureau  Federation  is  an  organization  that  is  in 
collusion  with  the  packer^.  That  is  what  I want  to  correct,  because 
that  is  not  true. 

Mr.  Marsh.  Not  as  to  the  membership  of  the  organization. 

Mr.  Kincheloe.  I do  not  care  what  petty  jealousies  you  have. 

Mr.  Marsh.  We  haven’t  any,  and  I think  we  have  a right  to  point 
out  what  their  bill  does. 

Mr.  Kincheloe.  You  evidently  have  a very  fraternal  feeling 
about  it. 

Mr.  Ten  Eyck.  Is  this  their  bill  ? 

Mr.  Marsh.  Mr.  Silver  told  me  it  was  their  bill.  I have  a type- 
written copy  of  it  in  my  pocket.  I think 

The  Chairman  (interposing).  Let  Mr.  Silver  answer  for  himself. 

Mr.  Silver.  That  bill  is  in  substance  the  bill.  I do  not  know 
whether  it  is  word  for  word,  but  practically. 

Mr.  Ten  Eyck.  And  isn’t  it  true,  Mr.  Silver,  you  have  had  a 
number  of  delegates  and  members  from  the  farm  federations  all  over 
the  country  here  considering  these  matters  relating  to  farm  improve- 
ment and  farm  industry,  and  is  this  bill  to  some  extent  the  outcome 
of  the  meetings  of  those  men  ? 

Mr.  Silver.  Yes;  going  back  further  than  that,  some  years  back 
before  the  organization  of  the  American  Farm  Bureau  Federation, 
the  midwest  States  had  a committee  which  had  considerable  dis- 
cussion and  did  considerable  work  with  reference  to  legislation  both 
for  and  against  the  packers  from  time  to  time.  That  same  committee 
had  been  carried  along,  not  in  total,  but  in  main,  into  the  American 
Farm  Bureau  Federation.  And  this  is  the  result  of  their  work. 
These  men  have  been  fighting  for  a solution  of  that  matter,  and  it 
crystallized  in  my  office  following  this  recent  convention  here,  when 
we  had  more  than  a hundred  farmers  here.  And  in  convention, 
following  the  work  of  the  committee,  and  the  different  processes  of 
the  committee  from  time  to  time,  this  bill  is  the  result  of  their  organi- 
zation and  their  work.  And  as  one  of  their  representatives  I am 
transmitting  it  to  Congress. 

The  Chairman.  You  say  their  work;  what  do  you  mean  by 
"their”? 

Mr.  Silver.  The  farmer  delegates  from  the  different  States. 

The  Chairman.  That  have  recently  met  here  in  Washington? 

Mr.  Silver.  Yes,  sir. 

^Ir.  Marsh.  On  page  18  of  the  Williams  bill,  which  is  section  309 
(a)  it  is  provided: 

That  any  person  complaining  of  anything  done  or  omitted  to  be  done  by  any  stock- 
yard  owner,  market  agency,  or  dealer  (hereinafter  in  this  section  referred  to  as  the 
“defendant”))  in  violation  of  the  provisions  of  sections  304,  305,  306,  or  307,  or  of  an 
order  of  the  Secretary  made  under  this  title,  may,  at  any  time  within  90  days  after 
the  cause  of  the  action  accrues,  etc. 

Whereas  the  Haugen  bill  provides  two  years,  to  apply  to  the  Secretary 
or  commission.  I do  not  know  why  we  should  limit  that  to  90  days. 
Farmers  are  very  busy  sometimes  and  they  move  slowly,  and  it  seems 
to  me  that  they  should  be  given  as  much  time  as  the  usual  statute 
of  limitations. 


474 


MEAT  PACKER. 


On  page  24  of  the  Williams  bill,  section  316  of  the  Haugen  bill  is 
omitted.  I do  not  know  why.  I will  read  section  316.  It  seems 
rather  important.  Section  316  of  the  Haugen  bill  is  as  follows: 

For  the  purpose  of  securing  effective  enforcement  of  the  provisions  of  this  title, 
the  provisions  (including  penalties)  of  sections  12,  14,  IGa,  17,  and  19,  and  of  the 
first  10  paragraphs  of  section  20,  of  the  Interstate  Commerce  Act,  as  amended,  and  of 
all  laws  relating  to  the  compelling  of  testimony  before  the  commission  and  the 
immunity  of  witnesses  in  connection  therewith,  or  to  the  suspending  or  restraining 
the  enforcement,  operation,  or  execution  of,  or  the  setting  aside  in  whole  or  in  part 
the  orders  of  the  commission,  are  made  applicable  to  the  jurisdiction,  powers,  and 
duties  of  the  commission  in  enforcing  the  provisions  of  this  title,  and  to  any  person 
subject  to  the  provisions  of  this  title,  except  that  the  commission  shall  have  no 
authority  to  prescribe  the  form  of  accounts,  records,  and  memoranda  of  a dealer, 
unless  it  finds  that  the  accounts,  records,  and  memoranda  kept  by  such  dealer  do  not 
fully  and  correctly  disclose  all  transactions  involved  in  his  business,  including  the 
true  ownership  of  such  business  by  stockholding  or  otherwise. 

I do  not  know  why  that  was  left  out.  It  is  a question  I would 
like  to  have  them  bring  out.  It  seems  to  me  in  substance  it  should 
be  included  in  this  amendment  and,  as  I say,  we  urged  you  to  include 
at  the  very  beginning  of  our  testimony. 

And  then  on  page  25  of  the  Williams  bill,  section  402  of  the  Haugen 
bill  is  entirely  omitted.  Section  402  of  the  Haugen  bill  appears 
printed  on  page  26  of  the  Haugen  bill,  and  reads  as  follows: 

If  any  officer,  employee,  agent,  director,  or  member  of  the  governing  board,  of  any 
packer,  stockyard  owner,  market  agency,  or  dealer,  negligently  omits  personally  to 
perform  any  necessary  act  or  properly  to  supervise  or  apportion  duties  among  his 
subordinates,  in  the  execution  of  the  authority  and  functions  vested  in  him,  and  by 
reason  of  such  omission  a violation  of  this  act  directly  results,  he  shall  be  liable  to  all 
the  penal  or  other  provisions  of  this  act  in  respect  to  such  violation.  The  provisions 
of  this  section  shall  be  held  to  extend  and  not  to  limit  the  application  of  sections  37 
and  332  of  the  act  entitled  “An  act  to  codify,-  revise,  and  amend  the  penal  laws  of  the 
United  States,”  approved  March  4,  1909,  and  nothing  in  this  section  shall  be  held 
to  relieve  any  packer,  stockyard  owner,  market  agency,  or  dealer  from  the  penal  or 
other  provisions  of  this  act. 

Now,  that  entire  section  is  omitted  in  the  Williams  bill  on  page  25, 
where  it  would  follow  section  401,  and  section  402  of  the  Williams 
bill  is  the  same — I think  identical,  practically  identical  with  section 
403  of  the  Haugen  bill. 

Now,  the  purport  and  effect  of  section  402  of  the  Haugen  bill  is, 
as  we  construe  it,  to  hold  the  packers,  themselves,  personally  to  a 
strict  accountability  so  that  they  can  not  make  a goat  out  of  some 
subordinate,  and  so  that  they  can  not  personally  evade  responsibility 
for  any  action  for  which  they  are  responsible.  We  do  not  see  why 
that  should  not  be  incorporated  in  the  bill. 

So  much  for  the  discussion  of  the  bill  itself. 

Now,  I would  like  to  read  some  correspondence  between  Mr. 
Ed.  C.  Lasater,  and  Mr.  Gray  Silver 

The  Chairman  (interposing).  In  that  connection,  there  has  been 
a good  deal  of  discussion  over  this  section. 

Mr.  Marsh.  Section  402  of  your  bill  ? 

The  Chairman.  Yes;  and  the  members  of  the  committee  and  the 
drafting  service  have  been  trying  to  find  some  language  that  would 
broaden  the  other  act,  and  at  the  same  time  we  do  not  want  to  go 
to  the  extent  of  putting  everybody  in  jail. 

Several  amendments  have  been  suggested  on  that  matter.  Now, 
if  you  can  suggest  any  language  as  a compromise  between  this  lan- 
guage and  striking  it  out  entirely,  we  will  be  glad  to  have  it.  I think 


MEAT  PACKER. 


475 


the  only  contention  here  is  in  the  word  “ negligently.”  Now,  the 
other  word  that  you  suggested  is  “ willfully.”  Of  course  the  burden 
of  proof  would  be  to  show  that  it  was  done  willfully,  and  it  would 
probably  be  hard  to  provp  an  abuse. 

Mr.  Marsh.  Well.  I don’t  know  as  “willfully”  would  weaken  it. 
It  is  hard  to  prove  the  purpose  for  any  act.  If  you  have  the  expres- 
sion “willfully,”  it  might  be  that  the  judge  would  know  what  his 
authority  should  be  or  what  his  responsibility  is,  assuming  there  is 
action  in  it  by  the  Secretary  of  Agriculture,  or  whoever  has  charge 
of  it. 

The  Chairman.  It  is  harder  to  prove  the  word  “willfully”  than 
“negligently.” 

Mr.  Marsh.  I beg  pardon. 

The  Chairman.  1 think  it  is  harder  to  prove  that  it  was  done  will- 
fully than  negligently. 

Mr.  Marsh.  1 think  it  would  be  a little  harder.  You  can  prove 
that  it  was  done,  and  then  he  would  say  he  forgot  it;  but  it  is  harder 
to  get  a conviction  for  negligence. 

Now,  on  December  22  Mr.  Ed.  C.  Lasater  wrote  the  following  let- 
ter. I will  read  it  in  full. 

Mr.  Kincheloe.  Who  is  Mr.  Ed.  C.  Lasater? 

Mr.  Marsh.  He  is  a large  grower  of  live  stock  at  Falfurrias,  Tex. 
He  has  been  before  this  committee  several  times.  He  wrote  Mr. 
Silver  as  follows: 

New  York,  December  22,  1920. 

Mr.  Gray  Silver, 

Occidental  Hotel,  Washington,  D.  C. 

My  Dear  Mr.  Silver:  It  is  my  understanding  that  Mr.  Howard  and  yourself  are 
in  favor  of  national  legislation  for  regulating  the  meat-packing  industry  covering  the 
following  principles: 

First.  A uniform  accounting  system  to  be  prescribed  by  some  national  agency. 

Second.  Acquisition  of  stockyards  by  the  railroads. 

Third.  Acquisition  of  all  refrigerator  and  special-equipment  cars  for  handling 
meats  and  all  perishable  farm  products  by  the  railroads. 

Fourth.  To  have  the  Department  of  Agriculture  give  advice  and  information  to 
cooperative  and  municipal  slaughterhouses  and  distributing  agencies  for  all  perish- 
able products  in  our  industrial  centers,  along  the  lines  of  section  14  in  the  present 
Gronna  Senate  bill. 

I might  say  that  is  practically  the  same  as  the  Kenyon-Anderson 
bill.  The  letter  continues : 

Please  advise  if  this  understanding  is  correct.  Address  me  at  30  East  Sixtieth 
Street,  New  York.  I think  that  the  farming  interests  can  reasonably  hope  for  much 
from  the  organization  which  you  gentlemen  represent.  Assuring  you  of  my  best 
wishes,  I am, 

fc.j,  Very  sincerely,  yours, 

L,  Ed.  C.  Lasater. 

On  December  31,  1920,  the  following  letter  was  sent  by  Mr.  Silver: 

American  Farm  Bureau  Federation, 

Washington , D.  C.,  December  31,  1920. 

Mr.  Ed.  C.  Lasater, 

30  East  Sixtieth  Street,  New  York  City. 

Dear  Mr.  Lasater:  Replying  to  your  letter  of  December  22,  would  say  that 
your  understanding  of  what  we  believe  is  needed  in  the  way  of  national  legislation 
for  the  regulation  of  the  packing  industry  is  correct.  Any  time  you  are  in  Washing- 
ton we  will  be  very  glad  to  have  you  call  and  see  us.  We  always  enjoy  having  you 
with  us.  With  best  wishes, 

Sincerely,  yours, 

Gray  Silver, 
Washington  Representative. 


476 


MEAT  PACKER. 


Now,  on  December  31,  1920,  that  was  the  opinion — I do  not  say 
of  the  American  Farm  Bureau  Federation,  but  according  to  Mr. 
Silver,  he  says:  “We  believe, ” and  signs  himself,  “Washington 
representative.  ” 

Thus,  it  seems  to  us,  that  these  provisions  are  the  very  minimum 
required,  and  you  will  notice  there  is  a very  wide  distinction  be- 
tween the  position  of  the  American  Farm  Bureau  Federation  as 
expressed  by  Mr.  Silver,  when  he  says  “would  say  that  your  under- 
standing of  what  we  believe  is  needed  in  the  way  of  national  legis- 
lation for  the  regulation  of  the  packing  industry  is  correct.”  I do 
not  know  whether  he  speaks  for  the 

Mr.  Ktncheloe  (interposing).  Suppose  Mr.  Silver  changes  his 
mind,  what  effect  is  that  going  to  have  on  this  committee  ? He  is 
not  writing  this  bill  or  passing  on  it. 

Mr.  Marsh.  May  I answer  the  question  ? 

Mr.  Kincheloe.  How  is  this  committee  interested  in  any  differ- 
ences between  you  and  Mr.  Silver?  It  seems  brotherly  love  does 
not  run  freely  between  you.  What  effect  does  that  have  on  any 
member  of  the  committee  legislating  for  the  packers  ? 

Mr.  Marsh.  As  a practical  man,  you  will  know  what  bearing  it 
has  on  legislation  to  have  an  agreement  between  the  packers  and 
the  American  Farm  Bureau  Federation.  The  packers  are  ex- 
tremely astute  gentlemen;  they  know 

Mr.  Kincheloe  (interposing).  That  is  not  answering  my  ques- 
tion. If  Mr.  Silver  has  changed  his  mind,  what  effect  will  it  have 
on  legislation,  and  what  do  we  care  anything  about  that? 

Mr.  Marsh.  I can  tell  you  a good  deal  better  when  I see  the 
legislation  that  comes  through. 

Mr.  Kincheloe.  You  can  tell  what  better,  you  mean? 

Mr.  Marsh.  I can  see  what  effect  this  change  would  have. 

Mr.  Kincheloe.  You  mean  on  the  membership  of  this  committee  ? 

Mr.  Marsh.  On  the  entire  membership  of  Congress,  and  on  the 
entire  country,  if  the  farmers  agree  on  what  legislation  they  want 
to  have.  If  they  do  not  agree,  wouldn't  it  be  more  difficult  to  get 
the  legislation  which  they  might  want  ? 

Mr.  Ten  Eyck.  Mr.  Marsh,  the  packers  can  not  control  me. 

Mr.  Marsh.  I know  that. 

Mr.  Ten  Eyck.  I am  going  to  vote  for  the  bill  I think  is  for  the 
best  interests  of  the  entire  country,  and  for  the  farming  interests! 
That  letter  of  Mr.  Lasater,  how  does  that  relate  to  the  Silver  bill 
or  the  Haugen  bill  ? 

Mr.  Marsh.  My  testimony  on  Tuesday  pointed  it  out. 

Mr.  Ten  Eyck.  You  do  not  accuse  Mr.  Haugen,  because  he  did 
not  get  your  ideas  first  of  endeavoring  to  work  with  the  packers  ? 

Mr.  Marsh.  No;  by  no  means.  Mr.  Haugen  has  not  expressed 
himself  as  in  favor  of  these  provisions. 

Mr.  Ten  Eyck.  What  I am  getting  at  is  this:  I for  one  am  never 
afraid  of  what  anybody  calls  a so-called  lobby.  My  office  is  open 
at  any  time  to  packers  to  come  in,  and  to  the  farmers  to  come  in, 
and  to  the  labor  organizations  to  come  in,  and  all  like  associations, 
because  if  we  hear  them  we  will  have  information  from  all  sides.  I 
am  glad  the  American  Farm  Bureau  Federation  has  put  this  bill  in, 
and  I am  pleased  to  have  heard  the  packers  yesterday  and  to-day, 
and  I am  glad  to  have  Mr.  Haugen’s  bill,  and  I am  glad  to  hear  from 


MEAT  PACKER. 


477 


everybody.  What  I object  to  is  not  that  you  point  out  the  difference 
between  these  bills,  but  accuse  the  American  Farm  Bureau  Federa- 
tion of  not  playing  fair. 

Mr.  Marsh.  I don’t  think  that  is  a fair  bill.  I am  going  to  the 
farmers  to  say  so.  I think  it  is  unfair,  and  I think  it  is  unjust,  and 
I know  you  concede  me  the  right  to  that  opinion. 

Mr.  Ten  Eyck.  As  I said  before,  I have  no  objection  whatever 
to  you  expressing  any  opinion  you  have  as  to  the  relative  value  or 
merits  of  the  two  bills,  but  I do  resent  what  you  say,  if  you  say  the 
American  Farm  Bureau  Federation  is  not  playing  fair  with  the 
farmers. 

Mr.  Marsh.  Well,  I regret  your  resentment,  and  I regret  very 
much  that  some  of  the  Farm  Bureau’s  actions  seem  to  indicate  what 
I have  said,  and  I regret  that  very  much  more  than  I regret  your 
resentment,  very  much  as  I regret  that. 

Mr.  Jones.  You  are  supporting  the  same  bill  and  measure  you 
were  the  other  day  ? 

Mr.  Marsh.  The  same  measure,  to  control  the  packers,  absolutely, 
Mr.  Jones. 

Mr.  Jones.  The  American  Farm  Bureau  Federation — what  measure 
do  they  indorse  ? This  is  for  my  own  personal  information. 

Mr.  Marsh.  They  have  asked  Mr.  Williams  to  introduce  a bill 
which  I have  been  discussing. 

Mr.  Jones.  That  is  all. 

Mr.  Kincheloe.  As  Mr.  Ten  Eyck  says,  I welcome  your  informa- 
tion and  opinions  on  these  two  bills,  in  pointing  out  the  differences. 
But  your  differences  with  Mr.  Silver  and  the  petty  jealousies  between 
you  do  not  interest  me. 

Mr.  Marsh.  The  merits  of  our  differences  will  interest  the  farmers. 

Mr.  Kincheloe.  I want  to  hear  your  ideas  about  that,  and  Mr. 
Silver’s  ideas  about  that,  and  we  have  had  the  packers  the  last  two 
days,  and  I confess  I need  all  the  information  I can  get,  and  then  I 
will  draw  mv  own  conclusions  and  opinions. 

Mr.  Ten  Eyck.  I regret  that  Mr.  Williams  is  not  here  to  say 
something  about  his  bill.  I think  before  this  record  closes  he  should 
have  an  opportunity  to  explain  it. 

The  Chairman.  I understood  you,  Mr.  Silver,  were  the  author  of 
the  bill,  or  the  man  that  presented  it  ? 

Mr.  Silver.  Yes. 

The  Chairman.  And  you  will  discuss  it? 

Mr.  Silver.  Yes,  sir. 

Mr.  Kincheloe.  I understood  him  to  tell  Mr.  Marsh  that  about 
all  he  had  to  do  with  it  was  to  introduce  it. 

Mr.  Marsh.  I told  Mr.  Williams  that  I regretted  to  have  to  dis- 
cuss his  bill  in  his  absence,  and  he  told  me  that  practically  all  he 
had  to  do  with  it  was  to  introduce  it. 

Now,  Mr.  Chairman,  to  take  up  some  of  the  criticisms  about  your 
bill.  To  take  up  the  objection  of  Mr.  Creigh  to  section  204  (a).  He 
seemed  to  think  that  would  cause  a general  hunting  expedition.  He 
objected  to  sections  204  (a)  and  (b),  on  page  6 of  the  bill.  Section 
204  (a)  starts: 

Whenever  the  Secretary  has  reason  to  believe  that  any  packer  has  violated  or  is 
violating  any  provision  in  this  title,  he  shall  cause  a complaint  in  writing  to  be  served 
upon  the  packer,  specifying  the  alleged  violations. 


478 


MEAT  PACKER. 


Now,  it  seems  to  me,  Mr.  Chairman,  that  this  statement  of  Mr. 
Creigh  is  important,  and  I am  glad  he  is  in  the  room,  and  am  glad 
Mr.  Veeder  is  here,  because  he  is  here  for  the  packers.  The  packers 
do  not  want  the  facts  known,  and  they  have  continually  objected  to 
this.  I want  to  read  you  from  what  the  Federal  Trade  Commission 
said  about  their  investigation.  This  is  from  the  summary  of  the 
report  of  the  Federal  Trade  Commission  on  the  meat-packing  industry. 
[Reading :] 

The  commission,  through  Mr.  Heney,  had  to  meet  deliberate  falsification  of  returns 
properly  required  under  legal  authority;  we  had  to  meet  schools  for  witnesses  where 
employees  were  coached  in  anticipation  of  their  being  called  to  testify  in  an  investi- 
gation ordered  by  you  and  by  the  Congress  of  the  United  States;  we  had  to  meet  a 
situation  created  by  the  destruction  of  letters  and  documents  vital  to  this  investiga- 
tion; we  had  to  meet  a conspiracy  in  the  preparation  answers  to  the  lawful  inquiries 
of  the  commission. 

Now,  Mr.  Chairman,  if  I understood  Mr.  Creigh  correctly— and  I 
do  not  want  to  do  him  an  injustice;  I am  not  a shorthand  writer,  and 
have  to  rely  on  my  memory — but  if  I understood  him  correctly,  he 
wanted  a full  bill  of  particulars  regarding  the  violations.  I think  it 
was  Mr.  Voigt  who  asked  about  specifying  the  amendment  “with  a 
reasonable  degree  of  particularity.”  Let  me  see  what  the  amend- 
ments have  been.  I read  from  this  summary  of  the  report  of  the 
Federal  Trade  Commission  on  the  meat-packing  industry,  page  8 
[reading] : 

We  also  know  that  the  five  packing  companies— Armour,  Swift,  Morris,  Wilson, 
and  Cudahy — conspired  together  in  the  preparation  of  their  answers  to  the  commis- 
sion’s inquiries  to  the  end  that  all  should  agree.  As  part  of  the  evidence  in  our  pos- 
session substantiating  this  statement,  the  following  letter  is  submitted. 

It  is  dated  August  2,  1917,  addressed  Messrs.  G.  F.  Swift,  jr., 
F.  S.  Hayward,  R.  C.  McManus,  A.  D.  White,  J.  M.  Chaplin.  L.  D.  H. 
Weld. 

Mr.  Creigii.  Mr.  Marsh,  if  you  do  not  mind,  I call  your  attention 
to  the  fact  that  all  that  was  gone  over  last  night. 

Mr.  McLaughlin  of  Nebraska.  That  letter  with  explanations  was 
put  in  about  six  different  times. 

Mr.  Marsh.  I do  not  want  to  encumber  the  record  with  anything 
that  has  already  been  gone  over.  Unfortunately  I have  not  been 
able  to  be  here  all  the  time,  as  I have  several  other  hearings. 

But  I think  we  are  justified  in  saying  that  the  meat  packers  do  not 
want  any  effective  legislation.  I shall  not  take  much  time  to  dwell 
on  that.  It  is  not  necessary.  Their  record  shows  it.  The  whole 
fight  is  whether  we  are  going  to  get  that  regulation  for  which  we  have 
made  12  years’  effort — whether  we  are  going  to  get  that  regulation 
after  12  years’  effort  or  not. 

And  I do  not  think  it  should  be  allowed  to  go  unchallenged,  the 
statement  that  there  has  been  no  complaint  made,  the  statement 
made  by  Mr.  Creigh.  Why,  there  was  complaint  from  everywhere; 
there  was  complaint  from  all  over  the  country,  from  the  live-stock 
producers  and  the  consumers,  and  this  call  for  legislation  was  due  to 
what  was  a national  complaint  about  the  packers. 

They  said  they  had  no  day  in  court.  Well,  Senator  Norris,  if  I 
remember,  in  the  Senate  committee  offered  to  let  them  put  in  any 
testimony,  and  I know  in  this  committee  they  have  had  an  oppor- 
tunity to  present  their  case.  It  simmers  right  down  to  this,  that 
they  do  not  want  to  be  regulated. 


MEAT  PACKER. 


479 


But  I noticed  how  enthusiastic  Mr.  Creigh  was  to  have  regulation 
of  future  dealings  in  grain.  It  all  depends  on  who  is  to  be  regulated. 
If  I correctly  understand,  in  the  Tincher  bill,  or  any  adequate  bill  for 
the  control  of  dealing  in  futures,  the  principle  is  identically  the  same, 
though  the  application  is  different  as  in  this  packer-control  legisla- 
tion, and  no  plea  which  the  packers  can  put  up  as  to  the  small  packers 
ought  to  have  any  weight  at  all. 

This  morning  Mr.  Wilson  said  the  one  great  trouble  is  the  unscien- 
tific and  inefficient  system  used  by  the  producers  in  marketing  their 
products  and  their  live  stock,  and  Mr.  Creigh  this  afternoon  said  the 
producers  are  justified  in  not  having  anything  or  enough  to  say  about 
the  way  they  handle  their  live  stock.  In  other  words,  there  is  an 
entirely  different  conclusion  reached  by  the  two  representatives  of 
the  meat-packing  concerns. 

Now,  I want  to  make  this  clear,  and  I want  to  have  it  understood 
that  I am  presenting  this  on  behalf  of  the  Farmers’  National  Council 
and  the  Peoples’  Reconstruction  League,  and  the  four  great  railway 
brotherhoods,  who  were  represented  here  by  Mr.  W.  N.  Clark,  the 
vice  president  of  the  railway  conductors,  that  we  have  not  asked 
legislation,  so  far  as  we  can  understand  legislation,  which  will  mean 
any  improper  restriction  of  the  packers;  we  do  not  ask  for  any  hasty 
or  unjust  action;  we  ask  for  full  publicity  as  to  their  conduct.  I 
want  to  say  this,  Mr.  Chairman,  if  the  packers  are  making  the  small 
profit  which  they  claim  they  are  making — if  the  packers  are  making 
these  small  profits,  and  if  they  have  anything  like  the  efficiency  which 
they  claim  they  have,  then  the  legislation  which  we  seek  which  is, 
with  some  slight  amendments,  similar  to  the  Haugen  bill — then  the 
legislation  which  should  be  enacted  to  control  them  in  this  country 
will  not  harm  them.  We  have  pretty  accurate  information,  we 
think  that  they  are  not  keeping  proper  records  and  that  they  keep 
their  books  in  such  a way  that  they  can  conceal  their  real  profits.  We 
hope  that  you  will  promptly  enact  this  legislation. 

Let  me  urge  again,  in  conclusion,  that  we  feel  there  will  be  no  per- 
manent solution  for  these  meat-packing  industry  abuses  until  all 
refrigerator  and  special  equipment  cars  and  all  principal  stockyards 
are  made  by  law  what  they  are  in  practice,  common  carriers,  and 
owned  by  the  railroads  and  operated  by  them  under  the  control  of 
Interstate  Commerce  Commission. 

I think  that  covers  my  brief  summary.  I could  go  into  more 
points,  but  I do  not  want  to  cumber  the  record. 

The  Chairman.  Very  well,  Mr.  Marsh;  we  thank  you. 

Mr.  Silver,  do  you  want  to  be  heard  ? 

Mr.  Kincheloe.  Let  me  ask,  is  there  a member  of  the  Federal 
Trade  Commission  to  be  heard  ? 

The  Chairman.  They  will  be  here  shortly,  and  are  probably  here 
now.  We  have  only  one  witness  who  wants  a few  minutes.  Yes; 
he  is  right  in  the  room  now. 

Mr.  Silver,  we  will  hear  you. 


480 


MEAT  PACKER. 


STATEMENT  OF  MR.  GRAY  SILVER,  WASHINGTON  REPRE- 
SENTATIVE OF  THE  AMERICAN  FARM  BUREAU  FEDERA- 
TION. 

Mr.  Silver.  Mr.  Chairman  and  gentlemen  of  the  committee,  I 
will  be  brief  and  confine  my  remarks  to  the  subject  and  I shall  stick 
closely  to  the  text  of  the  bill  before  us. 

The  Chairman.  Proceed  in  your  own  way. 

Mr.  Silver.  I desire  to  say,  that  our  farmers,  the  people  I repre- 
sent, are  very  much  interested  in  having  legislation  that  has  to  do 
with  properly  supervising  the  packers  and  getting  a different  result 
out  of  the  stockyards  of  the  country  where  they  market  their  stock, 
and  that  in  doing  so  and  for  the  purpose  of  bringing  about  that 
legislation,  they  have  seriously  and  earnestly,  through  committees 
and  otherwise,  worked  on  this  matter  for  some  years.  They  have 
gotten  information  where  they  could;  they  have  met  with  the 
people  that  had  information  and  have  in  every  way  looked  out  for 
information  that  would  help  them  to  arrive  at  a fair  conclusion, 
keeping  in  mind  that  the  farmers  are  the  producers  of  this  live  stock 
before  it  goes  to  any  processor,  and  before  it  goes  to  the  consumer, 
and  they  do  have  this  very  large  interest  to  defend  and  protect 
by  being  the  producers  of  this  stock  before  it  leaves  the  farm. 

And  they  have  a great  interest  in  knowing  and  seeing  as  it  goes 
along  that  the  channel  is  not  dammed  or  checked  in  such  way  as 
may  be  equivalent  to  a dam  at  times,  but  that  it  has  an  orderly 
process  from  the  farm  to  the  consumer,  and  that  in  that  process  or 
channel  there  are  no  unnecessary  obstructions  that  either  reflect  in 
unnecessarily  low  prices  to  the  producer  or  in  too  high  prices  at  the 
other  end;  for  too  low  prices  to  the  producer  makes  for  an  unhappy 
situation,  and  too  high  prices  to  the  consumer  reflects  it  also  by 
curtailing  consumption. 

So  in  this  bill  we  are  endeavoring  to  see  they  have  a proper  super- 
vision, a supervision  that  will  disclose  all  the  acts  of  the  stockyard 
people,  and  of  the  packers,  and  that  the  Secretary  has  proper 
authority  over  the  bookkeeping  system,  that  when  the  records — if 
the  time  should  be  or  ever  has  been  that  the  records  did  not  disclose 
the  facts — that  the  supervising  power  can  prescribe  such  methods 
as  will  enable  them  to  know  all  the  facts  and  things  that  will  have  to 
do  with  the  business  from  the  time  it  goes  into  the  yard  at  one  end 
and  until  it  goes  out  of  yards  or  plant  at  the  other  end.  One  of 
the  reasons  they  ask  that  this  supervisory  power  be  in  the  Depart- 
ment of  Agriculture  is  that  the  Secretary  of  Agriculture  has  similar 
authority  in  other  bureaus  that  are  doing  work  of  this  sort,  and 
these  bureaus  will  fit  in  with  the  others  and  the  processes  all  the  way 
down,  under  the  Secretary  of  Agriculture. 

In  doing  the  work  on  this  bill,  the  Haugen  bill  has  been  largely 
the  basis.  There  have  been  some  amendments  and  those  amend- 
ments, in  the  judgment  of  our  committee,  are  desirable.  We  do  not 
come  here  with  something  and  ask  you  not  to  use  your  judgment. 
We  submit  our  viewpoint.  It  is  up  to  the  members  of  this  committee 
and  to  the  Members  of  this  Congress  to  determine  the  legislation. 

The  Chairman.  That  is  your  privilege,  and  the  privilege  of  every- 
body else.  We  invite  everybody. 

Mr.  Silver.  That  is  the  spirit  we  are  doing  it. 


MEAT  PACKER. 


481 


The  Chairman.  And  this  committee  has  encouraged  it. 

Mr.  Silver.  Now,  I have  here,  written  out,  every  amendment  or 
every  change  or  difference  between  the  Williams  bill  and  the  Haugen 

bill. 

Mr.  Kincheloe.  Have  you  got  that  so  it  can  go  into  the  record? 
Mr.  Silver.  I will  be  very  glad  to  leave  it  with  you,  and  it  can  go 
in  the  record  and  it  gives  every  difference  between  them.  We  have 
briefed  them  so  that  we  could  have  that  difference.  I am  taking  the 
bills  as  we  turned  through  them;  on  the  first  page,  where  we  strike 
out  after  the  words  Hive  stock”  the  word  “ products”  and  used  the 
words  “meat  food  products”  and  “edible”  to  make  it  clear. 

The  Chairman.  Without  objection,  this  statement  may  go  in. 

(The  statement  referred  to  is  as  follows :) 

Page  1,  line  10,  strike  out  ‘‘horses,  mules”  and  add  “and”  after  “goats.” 

Page  1,  line  11,  strike  out  words  “live  stock’  ’ and  insert  in  lieu  thereof  the  words 
“meat  food”;  and,  after  “all,”  insert  “edible.” 

Page  1,  line  13,  strike  out  “derived  in  whole  or  in  part  from  “live  stock.” 

Page  3,  line  5,  strike  out  the  word  “live’  ’ and  insert  in  lieu  thereof  “meats.” 

Page  3,  line  6,  strike  out  “stock  products”  and  insert  in  lieu  thereof  “meats  or 
meat  food  products.  ” 

Page  4,  line  1,  strike  out  the  word  “title’  ’ and  insert  in  lieu  thereof  “act. ” 

Page  4,  line  3,  insert,  after  “packer,”  “with  the  effect  of  unduly  restraining  com- 
merce or  of  creating  a monopoly.  ” 

Page  8,  line  5,  insert,  after  “by,”  “the  weight  of  the.” 

Page  8,  line  17,  insert,  after  the  word  “by,”  “the  weight  of  the.” 

Page  9,  line  4,  strike  out  all  of  the  words  after  “decree.” 

Page  9,  line  5,  strike  out  entire  line. 

Page  9,  line  6,  strike  out  entire  line. 

Page  10,  line  14,  insert,  after  “packer,”  “stock  owner  or  market  agency.” 

Page  10,  line  19,  insert,  after  “packer,”  “stock  owner  or  market  agency.” 

Page  10,  line  21,  insert,  after  “who,”  “fails  to”;  strike  out  final  “s”  in  “keeps”; 
strike  out  “any  other  or  different”;  insert,  after  “keep,”  the  word  “such.” 

Page  10,  line  22,  strike  out  the  words  “than  those”  and  insert  in  lieu  thereof  “in 
the  manner  and  form.  ’ ’ 

Page  10,  line  23,  insert,  after  “packer,”  “stock  owner  or  market  agency.” 

Page  11,  line  19,  strike  out  “(1).” 

Page  11,  line  20,  strike  out  “or  (2)  furnish-.” 

Page  11,  line  21,  strike  out  “ing  stockyard  services”  and  insert  at  end  of  line  13. 

Page  12,  line  3,  strike  out  the  term  ‘“com-.” 

Page  12,  line  4,  strike  out  “mission’  means  the  Interstate  Commerce  Commission.” 

Page  12,  line  9,  strike  out  “horses,  mules.” 

Strike  out  the  word  “commission”  and  insert  in  lieu  thereof  “Secretary”:  Page  12, 
line  15;  page  12,  line  25;  page  13,  line  4;  page  13,  line  8;  page  14,  line  3;  page  14,  line  7 ; 
page  14,  line  15;  page  14,  line  19;  page  14,  line  25;  page  15,  line  3,  page  15,  line  9;  page 
15,  line  12;  page  15,  line  14;  page  15,  line  16;  page  15,  lines  22—23 ; page  16,  line  5; 
page  16,  line  9;  page  16,  line  20;  page  17,  line  4;  page  17,  line  11;  pagfe  17,  line  22; 
page  18,  line  2;  page  18,  line  12;  page  18,  line  14;  page  18,  line  16;  page  18,  hne  19; 
page  19,  lines  1,  3,  10,  13,  and  16;  page  20,  lines  1,  3,  15,  and  18;  page  21,  lines  4,  6, 
10,  and  19;  page  22,  line  5;  page  23,  lines  6,  7,  8,  11,  14,  and  19;  page  24,  lines  11 
and  13. 

Strike  out  the  word  “it”  and  insert  in  lieu  thereof  “he”:  Page  12,  lines  16  and  20; 
page  13,  line  9;  page  15,  line  18;  page  19,  lines  2 and  18. 

Strike  out  the  word  “its”  and  insert  in  lieu  thereof  “his”:  Page  15,  lines  17  and  24  ; 
page  19,  lines  11  and  18;  page  21,  line  4;  page  23,  line  17. 

Page  17,  after  end  of  paragraph  “ (h),”  line  13,  insert  “any  stockyard  owner,  market 
agency,  or  dealer  may  appeal  from  any  order,  rule,  regulation,  or  action  of  the  Secre- 
tary, in  which  case  the  procedure  shall  be  as  provided  in  sections  204,  205,  and  206, 
Title  II,  of  this  act,  and  no  penalty  shall  accrue  in  such  case  until  said  order,  rule, 
regulation,  or  action  shall  become  final.” 

Page  19,  line  13,  strike  out  “ two  years,”  and  insert  in  lieu  thereof  “ninety  days.” 

Strike  out  all  of  section  316,  on  pages  24  and  25. 

Strike  out  all  of  section  402,  on  page  26. 

Strike  out  the  word  ’‘title”  in  section  208,  second  line,  and  add  in  lieu  thereof  the 
word  “act”;  make  same  change  in  first  word,  second  line,  next  page. 

46985—21 31 


482 


MEAT  PACKER. 


Mr.  Jones.  Which  bill  is  this  you  are  speaking  of  ? 

Mr.  Silver.  The  Williams  bill. 

The  Chairman.  Why  do  you  strike  out  “ horses  and  mules”  ? 

Mr.  Silver.  It  was  our  thought  that  the  horses  and  mules  are  not 
usually  killed,  so  there  was  no  need  of  bringing  them  in ; that  horses 
and  mules  are  sold  in  many  stockyards  in  this  country  where  the  kill- 
ing of  cattle  is  not  carried  on.  Those  yards  are  under  the  authority 
of  the  Interstate  Commerce  Commission. 

The  Chairman.  But  they  slaughter  horses. 

Mr.  Silver.  To  some  extent. 

The  Chairman.  They  were  brought  under  the  meat  inspec- 
tion act. 

Mr.  Silver.  Yes. 

The  Chairman.  They  are  handled  exactly  the  same  as  live  stock. 

Mr.  Silver.  When  it  is  used  for  that  purpose,  it  is  under  the  act, 
but  where  there  is  no  such  use,  we  thought  it  was  not  necessary. 

The  Chairman.  We  simply  used  the  language  of  the  other  act; 
I do  not  think  it  is  of  very  much  importance.  But  you  would  not 
want  to  include  one  and  exclude  the  other. 

Mr.  Silver.  Wherever  it  is  edible  it  is  under  this  language,  and  it 
was  thought  that  we  would  control  the  meat-food  products  or  edible 
meat-food  products  in  this  bill.  We  have  different  thoughts  on  the 
question  of  by-products.  For  instance,  fertilizer.  I could  mention 
others.  There  is  no  thought  that  we  want  to  bring  such  companies  as 
the  American  Woolen  Co.  or  the  fertilizer  manufacturers  under  the 
bill.  The  large  packers  do  not  produce  a large  percentage  of  the 
fertilizer,  and  we  want  to  control  that  industry  in  some  other  way. 
We  would  want  to  control  the  fertilizer  industry  in  another  way; 
we  would  approach  it  from  another  angle. 

Now,  that  appears  beginning  on  page  3. 

Mr.  Kincheloe,  You  mean  you  would  control  it  from  another 
angle  ? 

Mr.  Silver.  Approach  it. 

Mr.  Kincheloe.  What  other  angle — some  other  legislation,  you 
mean? 

Mr.  Silver.  Some  other  legislation  that  would  not  connect  it  up 
as  this  does.  When  we  approach  it  we  want  to  bring  in  the  fertilizers 
as  a whole,  and  not  in  part. 

On  page  4 we  have  the  amendment  referred  to  awhile  ago  “with 
the  effect  of' unduly  restraining  commerce  or  of  creating  a monopoly.” 
That,  in  the  judgment  of  our  committee,  was  desirable.  You  gen- 
tlemen, of  course,  pass  on  it.  You  know  whether  it  is,  in  your  judg- 
ment, best  or  not. 

The  Chairman.  Tell  us  why  the  limitation. 

Mr.  Silver.  Keep  in  mind  that  while  I was  a member  of  the 
committee,  I was  unable  to  sit  with  them  except  while  they  were 
here  in  Washington.  This  work  was  largely  done  eslewhere.  I am 
not  as  familiar  with  this  bill  as  I ought  to  be  to  testify  before  the 
committee.  Mr.  Howard  Leonard,  chairman  of  the  committee, 
ought  to  be  here,  but  I am  doing  the  best  I can. 

But  the  thought  is  that  our  committee  wants  to  go  as  far  as  they 
can  rightly  go,  not  to  reflect  any  harm  on  the  producers  of  the  live 
stock.  I think,  also,  that  under  the  supervisory  powers  we  will  have 
information  and  a starting  place  from  which  amendments  or  addi- 
tions can  be  made  when  necessary.  We  are  doing  a certain  amount 


MEAT  PACKER. 


483 


of  guessing  at  this  time  as  to  this  legislation.  We  will  not  be  doing 
guessing  when  we  know  the  conditions  and  know  what  we  want  to 
cure. 

Mr.  Kincheloe.  Let  pne  ask  you:  You  say,  I understand,  this 
bill  meets  the  approbation  or  views  of  all  your  committee  ? 

Mr.  Silver.  Yes. 

Mr.  Kincheloe.  How  was  this  committee  formed  to  write  this  bill, 
and  who  selected  them  ? 

Mr.  Silver.  This  committee  was  appointed  by  Mr.  Howard,  our 
president,  at  a Chicago  meeting  something  like  a year  ago,  but 
taking  a committee  that  had  been  operating  for  some  time  under  the 
mid-west  groups. 

Mr.  Kincheloe.  Is  that  the  committee  of  17? 

Mr.  Silver.  No;  that  was  a grain  committee  exclusively. 

Mr.  Kincheloe.  It  was  a committee  to  draft  this  legislation? 

Mr.  Silver.  Yes;  and  Mr.  Howard,  Mr.  Leonard,  and  others 
appeared  here  to  testify. 

Mr.  Ten  Eyck.  This  committee  was  appointed  at  an  annual 
meeting,  were  they  not  ? 

Mr.  Silver.  I think  so,  but  I am  not  sure.  It  was  at  a Chicago 
meeting. 

Mr.  Kincheloe.  How  many  are  on  the  committee  ? 

Mr.  Silver.  Five. 

Mr.  Kincheloe.  This  bill  was  introduced  on  the  3d;  it  did  not  get 
through,  or  was  not  written  before  that  ? 

Mr.  Silver.  Yes;  it  came  to  my  office  recently. 

Mr.  Kincheloe.  You  say  you  do  not  know  the  membership  of 
that  committee  ? 

Mr.  Silver.  Mr.  Howard  Leonard  is  the  chairman,  and  I think  Mr. 
Sconce  was  at  one  time  on  it,  and  later  some  one  succeeded  him.  I 
was  a member  of  it,  but  as  I was  at  Washington  and  busy,  I did  not 
sit  much  with  the  committee. 

Mr.  Kincheloe.  You  do  not  know  the  membership,  you  ssy  ? 

Mr.  Silver.  Mr.  Howard  Leonard,  the  chairman,  and 

Mr.  Kincheloe.  Were  they  selected  on  account  of  geographical 
location  ? 

Mr.  Silver.  No,  sir;  because  they  were  from  the  midwest  group, 
and  they  were  all  men  who  had  to  do  with  the  packer  legislation, 
and  were  familiar  with  that  subject. 

Mr.  Kincheloe.  Were  there  any  farmers  on  that  committee? 

Mr.  Silver.  They  were  all  farmers. 

Mr.  Kincheloe.  I was  asking  for  information. 

Mr.  Silver.  Yes;  each  one  was  a farmer. 

Mr.  Sinclair.  Can  you  give  us  the  names  of  that  committee? 

Mr.  Silver.  Yes;  President  Howard,  Howard  Leonard,  D.  O. 
Thompson,  and  S.  W.  Tater,  and  the  legislative  committee  consisting 
of  Messrs.  Bradfate,  Jamison,  and  Gray. 

This  bill  was  discussed  on  our  convention 

Mr.  Kincheloe  (interposing).  Was  there  any  action  taken  on  this 
bill  for  legislation  at  your  convention  here  ? 

Mr.  Silver.  This  bill  is  the  result  of  the  action  of  the  committee 
and  the  convention. 

Mr.  Kincheloe.  You  mean  the  Washington  convention  discussed 
and  approved  this  bill  ? 


484 


MEAT  PACKER. 


Mr.  Silver.  Yes;  we  passed  a resolution  and  I am  here  to  transmit 
it  and  the  bill  to  you. 

RESOLUTION. 

We  recommend  that  there  should  be  regulatory  legislation  concerning  the  meat- 
packing industry  to  insure  live-stock  production  against  unfair  practices.  We  further 
believe  that  such  regulatory  power  should  be  vested  in  the  Department  of  Agriculture. 
We  reaffirm  our  previous  resolution  for  fair  and  just  measures  in  the  interest  of  both 
the  industry  and  the  producers. 

The  Chairman.  Did  the  convention  adopt  a resolution  authorizing 
the  appointment  of  a committee  ? 

Mr.  Silver.  No;  it  came  in  from  the  committee;  the  committee 
had  been  at  work  for  years. 

Mr.  Ten  Eyck.  What  the  chairman  meant,  Had  the  Chicago  con- 
vention appointed  a committee;  at  the  convention  in  Chicago,  was 
there  a committee  appointed  ? 

Mr.  Silver.  Yes. 

The  Chairman.  There  or  at  Washington? 

Mr.  Silver.  The  committee  was  at  work  before  the  Washington 
meeting;  it  was  authorized  in  that  way. 

Mr.  Jones.  It  was  authorized  at  Chicago  ? 

Mr.  Silver.  Yes. 

Mr.  Kinciieloe.  You  say  it  was  brought  from  Chicago  and  ap- 
proved at  Washington? 

Mr.  Silver.  Not  in  this  form  exactly. 

Mr.  Kincheloe.  Is  there  a record  of  the  minutes  of  the  meeting 
at  Washington? 

Mr.  Silver.  The  minutes  of  the  meeting  I have  not  with  me. 

Mr.  Ten  Eyck.  It  was  not  a convention;  it  was  an  assembly  of  the 
delegates  ? 

Mr.  Silver.  That  is  what  it  was.  We  called  it  a convention.  It 
was  a getting  together  of  the  delegates  of  the  States,  and  we  invited 
a number,  and  we  had  some  60  or  75  or  100  farmers  here. 

Now,  on  page  10,  in  the  amendment  as  to  the  bookkeeping  [reading] : 

The  Secretary  may  prescribe  the  manner  and  form  in  which  accounts,  records, 
and  memoranda  shall  be  kept,  and  thereafter  any  packer  who  fails  to  keep  such  ac- 
counts, records,  and  memoranda  in  the  manner  and  form  prescribed  or  approved  by 
the  Secretary,  shall,  upon  conviction,  be  fined  not  more  than  $5,000  or  imprisoned 
not  more  than  three  years,  or  both. 

That  is  intended  to  give  full  control  to  the  Secretary,  and  this  bill 
provides  for  him  having  supervisory  powers  to  prescribe  the  form. 
That  does  not  mean  that  they  may  not  have  a memoranda  or  stock 
list,  or  something,  but  so  far  as  the  records  disclose  what  their  business 
is,  it  is  prescribed  by  the  Secretary  of  Agriculture,  unless  you  see  fit 
to  put  the  authority  elsewhere. 

I am  not  calling  attention  to  the  striking  out  of  the  title,  and  such 
as  that. 

Of  course,  where  we  strike  out  the  word  “commission,”  the  word 
“Secretary”  is  used  instead. 

Now,  over  on  page  17,  paragraph  (i),  that  is  a place  where  I would 
like  to  ask  to  strike  out  the  provision  with  reference  to  its  being 
thereafter  violated.  We  do  not  want  that  in. 

The  Chairman.  Will  you  kindly  state  why  you  omitted  the  words 
on  page  11,  “or  furnishing  stockyard  services?' 

Mr.  Jones.  What  line  is  that  ? 


MEAT  PACKER. 


485 


The  Chairman.  It  is  on  line  20. 

Mr.  Silver.  We  want  to  write  that  in  the  term  following  stockyard 
“ operating  a stockyard  or  furnishing  stockyard  services”;  changing 
from  one  place  to  the  other. 

The  Chairman.  You  Want  to  insert  that  some  place  else  ? 

Mr.  Silver.  Yes. 

The  Chairman.  It  has  not  been  so  inserted. 

Mr.  Silver.  We  will  insert  it  now. 

The  Chairman.  You  want  to  preserve  that? 

Mr.  Silver.  Yes;  we  want  to  include  that,  but  thought  it  was 
better  in  the  line  above. 

Then  on  page  18,  where  it  is  two  years’  time.  We  are  not  par- 
ticular about  the  90  days.  Make  it  two  years  if  you  want  to,  but 
we  thought  when  the  matter  was  fresh  in  the  minds  of  the  people 
who  are  competent  to  testify  it  ought  to  be  closed.  We  are  not 
objecting  to  any  other  time  that  the  committee  thinks  proper. 
It  might  be  better  to  make  it  six  months,  but  we  thought  90  days 
was  a sufficient  time. 

The  Chairman.  What  about  page  12;  do  you  care  to  comment  on 
that  ? 

Mr.  Silver.  Maybe  I have  left  out  something. 

The  Chairman.  You  left  out  something  about  what  the  stock- 
yards  that  are  within  the  definition  are  finally;  that  is,  the  Secretary 
defines  what  stockyards  come  within  the  requirements,  150,000  head 
of  cattle,  and  500,000  hogs. 

Mr.  Silver.  Yes. 

The  Chairman.  And  you  leave  out  the  particular  language  that 
provides  that  the  findings  shall  be  final;  that  is,  the  finding  as  to 
what  stockyards  are  within  the  foregoing  definition. 

Mr.  Silver.  After  I go  over  the  bill  I will  turn  to  my  memorandum 
a minute. 

The  Chairman.  Well,  pass  by  it. 

Mr.  Silver.  I haven’t  it  just  in  mind. 

Over  on  page  24,  in  section  316,  that  was  stricken  out  because  we 
find  they  have  that  same  authority  elsewhere. 

And  in  section  402,  the  chairman  kindly  explained  that  a while  ago. 
It  was  the  same  thought  you  expressed  a while  ago;  it  is  not  the 
corporate  responsibility,  but  personal  responsibility.  That  expresses 
our  choice.  We  are  not  arbitrary,  but  we  are  giving  you  the  benefit 
of  our  thought. 

The  Chairman.  Have  you  substituted  any  other  language  for  what 
there  is  there  ? 

Mr.  Silver.  I don’t  know  that  I can  answer  that.  It  was  discussed 
in  my  presence;  that  is,  whether  they  had  some  other  language  in 
mind,  but  they  did  not  transmit  it  to  me.  If  they  had  some  other 
thought,  it  did  not  reach  me. 

Now,  that  is  in  a hurried  way  going  through  and  pointing  out  the 
differences. 

Now,  you  are  all  familiar  with  the  Haugen  bill,  and  the  provisions 
of  the  Haugen  bill  as  amended. 

The  Chairman.  Do  you  care  to  comment  on  any  of  the  other  bills  ? 

Mr.  Silver.  I think  not.  They  are  before  you.  I was  transmit- 
ting our  thought,  and  telling  you  how  we  arrived  at  it  and  am  leaving 
it  with  you  gentlemen.  Unless  there  are  some  questions,  that  is  all. 


486 


MEAT  PACKER. 


The  Chairman.  We  thank  you  very  much. 

Mr.  Silver . Let  me  say  just  one  more  word  about  the  letter  of 
Mr.  Lasater.  To  my  mind  we  have  complied,  either  in  this  bill  or 
some  other  legislation,  with  every  provision  of  the  Lasater  letter. 
I brought  that  in  to  explain  it.  Mr.  Lasater  did  write  me,  and  I 
answered  him.  Rut  we  have  complied,  in  one  form  or  another,  we 
think. 

The  Chairman.  We  all  appreciate  there  is  a difference  of  opinion 
on  the  various  acts. 

Mr.  Silver.  Yes. 

Mr.  Thompson.  You  represent  the  farm  bureaus,  do  you? 

Mr.  Silver.  Yes. 

Mr.  Thompson.  Are  you  in  favor  of  indorsing  the  Williams  bill; 
does  that  meet  your  approval,  as  you  have  amended  it  here  ? 

Mr.  Silver.  Yes.  1 

Mr.  Thompson.  Is  that  the  idea  of  the  bureau  ? 

Mr.  Selver.  Yes. 

Mr.  Thompson.  Have  you  conferred  with  the  packers  in  any  way? 

Mr.  Silver.  Our  group  has  conferred  with  the  packers,  the  same 
as  with  many  others,  including  the  Secretary  of  Agriculture. 

Mr.  Thompson.  Trying  to  get  together;  is  that  the  idea? 

Mr.  Silver.  Bringing  everybody  in 

Mr.  Thompson  (interposing) . On  this  Williams  bill,  or  the  so-called 
Haugen  bill,  it  is  your  idea  to  get  together  and  offer  some  legislation 
th  1 ' tble  to  all  parties  ? 


Mr.  Thompson.  That  is  all  I want. 

Mr.  Veeder.  May  I make  one  statement,  so  as  to  avoid  a mis- 
understanding in  the  record  ? There  has  been  considerable  discussion 
here  whether  horses  and  mules  shall  be  included  in  this  bill  or  not. 
None  of  the  packers,  and  no  packers,  so  far  as  I know,  are  engaged  in 
the  slaughtering  of  horses  or  mules  for  food.  During  the  war,  I 
think,  there  were  some  slaughtered  for  export,  but  not  for  consump- 
tion in  this  country.  Horses  and  mules  are  bought  and  sold  in  the 
stockyards,  but  not  for  the  purpose  of  slaughter. 

The  Chairman.  You  are  also  aware  that  there  are  some  plants  in 
Milwaukee,  and  probably  other  parts  of  the  country. 

Mr.  Veeder.  No;  I am  not  familiar  with  any  plants  that  slaughter 
horses  and  mules. 

The  Chairman.  Not  now;  they  were. 

Mr.  Veeder.  There  was  a time  they  were  slaughtering  them  for 
export.  But  horses  and  mules  are  included  in  this  bill.  They  are 
bought  and  sold  for  other  purposes  at  the  stockyards. 

The  Chairman.  The  thought  was  this,  that  if  anybody  is  attempt- 
ing to  slaughter  horses  for  meat  it  might  be  well  to  include  it  in  this 
bill. 

Mr.  Veeder.  I wanted  to  make  that  explanation. 

The  Chairman.  You  have  no  objection  to  including  horses? 

Mr.  Veeder.  I have  no  objection  to  including  horses  and  mules, 
but  I made  that  explanation  so  there  would  be  no  misunderstandings . 
I do  not  see  the  use  of  putting  it  in. 

The  Chairman.  We  will  now  hear  from  the  representative  of  the 
Federal  Trade  Commission. 


MEAT  PACKER. 


487 


STATEMENT  OF  MR.  WALTER  Y.  DURAND,  ASSISTANT  CHIEF 
OF  COMMERCE,  FEDERAL  TRADE  COMMISSION. 


The  Chairman.  Please  state  your  name. 

Mr.  Durand.  Walter  Y.  Durand,  Assistant  Chief  of  Commerce, 
Federal  Trade  Commission. 

Mr.  Chairman,  the  commission  received  from  you  this  letter,  dated 
May  5,  inviting  it  to  send  a representative  here  to  this  hearing,  and 
if  I may,  I will  read  this  letter  so  that  it  may  be  in  the  record. 


May  5,  1921. 

Hon.  Huston  Thompson, 

Chairman  Federal  Trade  Commission , Washington,  D.  C. 

My  Dear  Mr.  Thompson:  I have  been  instructed  by  the  committee  to  invite  you 
to  send  a representative  to  appear  before  the  committee  to-morrow  afternoon,  Friday, 
May  6,  in  connection  with  the  meat  packer  hearings  now  being  held  and  which  close 
to-morrow.  The  resolution  extending  the  invitation  requests  information  as  to  whether 
you  commission’s  report  on  the  packer  investigation  was  sent  through  the  State  De- 
partment or  otherwise  to  the  foreign  governments,  and  if  so,  a copy  of  the  letter  of 
transmittal,  and  the  reason  for  so  doing. 

Very  truly,  yours, 

G.  N.  Haugen,  Chairman. 


I have  been  asked  by  the  commissioners  to  appear  here  as  represent- 
ing them  in  responding  to  this  request  of  the  committee. 

Answering  as  to  whether  the  commission’s  meat-packing  report  was 
sent  through  the  State  Department  or  otherwise  to  the  foreign  govern- 
ments, that  question  has  already  been  answered  specifically  by  the 
commission  in  a special  report  made  to  the  Senate  on  July  31,  1919, 
in  response  to  Senator  Sherman’s  resolution.  This  report,  in  response 
to  that  resolution,  was  printed  in  the  Congressional  Record  of  July  31, 
1919,  pages  3410  to  3419,  and  with  your  permission  I will  explain 
briefly,  particularly  for  the  benefit  of  any  new  members  of  the  com- 
mittee, what  the  Sherman  resolution  was,  and  this  will  explain  also 
why  the  commission  is  unable  to  send  you  a response  to  that  part  of 
your  request  asking  that  it  furnish  a copy  of  any  letter  transmitting 
the  meat-packing  report  to  foreign  governments. 

Senator  Sherman’s  resolution,  which  was  referred  to  the  Senate 
Committee  on  Interstate  and  Foreign  Commerce,  was  as  follows: 

July  10,  1919. 

RESOLUTION. 

Resolved,  That  the  Federal  Trade  Commission  be,  and  is  hereby,  requested  to  furnish 
to  the  Senate,  at  the  earliest  possible  moment,  copies  of  all  documents,  correspondence, 
or  other  papers  in  its  possession  relating  to  its  efforts  or  action  in  promotion  or  concerning 
the  export  trade  in  meats  from  the  United  States  to  the  United  Kingdom  of  Great 
Britain  or  any  of  its  colonial  dependencies,  and  other  countries,  and  especially  any 
communications  by  the  Federal  Trade  Commission,  or  any  of  its  members,  officers, 
agents,  or  employees  with  the  officers  or  agents  of  any  foreign  government,  and  more 
especially  all  communications  had  with  the  Ministry  of  Reconstruction  of  Great 
Britain  or  the  members  thereof  appointed  in  1918,  and  to  include  all  correspondence 
with  the  Hon.  Charles  A.  McCurdy,  Member  of  Parliament,  of  the  Ministry  of  Foods, 
and  recently  chairman  of  the  committee  on  trusts;  also  such  correspondence  with  any 
other  member  of  the  Ministry  of  Reconstruction  in  relation  to  the  meat  industries  of 
the  United  States. 

That  resolution  was  adopted,  following  charges  on  the  floor  of  the 
Senate  that  the  commission,  and  particularly  Commissioner  Colver, 
had  deliberately  attempted  to  injure  the  export  or  foreign  trade  of  the 
packers;  that  Commissioner  Colver  had  gone  to  England  at  public 


488 


MEAT  PACKER. 


expense;  that  he  had  made  speeches  and  given  out  interviews  attack- 
ing the  packers.  Extracts  from  an  alleged  interview  with  Commis- 
sioner Colver  as  printed  in  the  London  Star,  were  read  into  the 
record. 

When  the  Sherman  resolution  was  answered  in  detail  by  the  com- 
mission’s report  to  the  Senate,  and  the  voluminous  documents  called 
for  by  the  resolution  were  transmitted  to  the  Senate,  among  the  doc- 
uments was  this  letter  which  your  committee  requests  us  to  furnish. 
It  is  listed  in  the  report  like  this;  that  is,  in  the  commission’s  report 
to  the  Senate  in  answer  to  the  Sherman  resolution:  You  will  find  it 
on  page  3414  of  the  Congressional  Record  for  July  31,  1919: 

Mr.  Kincheloe.  How  long  is  that  letter? 

Mr.  Durand.  This  is  a short  paragraph  listing  the  letter. 

Mr.  Kincheloe.  Have  you  got  the  letter? 

Mr.  Durand.  I have  not  got  the  letter. 

Mr.  Kincheloe.  Do  you  mean  the  letter  written  by  the  Secretary 
of  State  to  the  foreign  countries  ? 

Mr.  Durand.  Yes;  I do  not  have  it.  I was  explaining  why  I could 
not  give  it  to  the  committee.  I will  give  you  a copy  of  it  that  appears 
in  the  Congressional  Record.  I was  just  explaining  that  the  resolu- 
tion calling  for  that  report  called  for  a lot  of  data,  and  this  was  listed 
in  the  commission’s  report  as  follows,  reading  from  page  3414: 

File  8754-4303:  Letter  September  27,  1918,  from  Federal  Trade  Commission  to 
Chief  Diplomatic  Bureau,  State  Department,  Washington,  requesting  that  copies  of 
meat-packing  report  be  sent  through  the  proper  channels  to  the  foreign  Governments 
named.  (Inclosure  to  foregoing  letter,  being  copy  of  suggested  letter  transmitting 
said  report  to  the  heads  of  the  respective  Governments.) 

Mr.  Kincheloe.  You  say  that  letter  is  in  the  Congressional  Record 
somewhere  ? 

Mr.  Durand.  That  letter  we  can  not  furnish  you,  because  the 
resolution,  while  as  adopted  by  the  Senate  it  called  for  copies  of  all 
those  documents,  the  commission  found  that  such  a mass  of  material 
was  included  under  the  terms  of  the  resolution  that  it  directed  its 
secretary  to  communicate  with  the  Secretary  of  the  Senate  as  to  the 
proper  method  of  procedure,  because  the  resolution  indicated  that  it 
desired  the  documents  to  be  furnished  with  the  utmost  dispatch,  and 
the  commission  was  advised  by  the  Secretary  of  the  Senate  that  the 
commission  should  furnish  to  the  Senate  the  originals  of  all  those 
documents,  and  that  the  Senate  would  then  copy  such  of  the  docu- 
ments as  it  desired  to  keep  for  its  files  and  would  thereafter  return 
all  of  the  originals  to  the  commission.  Now,  none  of  those  originals 
have  been  returned. 

Mr.  Kincheloe.  And  it  includes  this  original  letter? 

Mr.  Durand.  These  documents  include  the  letter  that  you  refer  to. 
As  I understand,  the  letter  is  now  in  the  files  of  the  Senate  committee. 

Mr.  Clarke.  Along  with  the  letter  went  the  summary  of  the 
report  ? . 

Mr.  Durand.  I will  read  you  what  is  in  the  letter.  I might  say 
that  the  commission  happens  to  have  copies  or  photostat  copies  of  a 
great  many  of  those  documents  that  went  to  the  Senate,  but  did  not 
happen  to  have  any  copies  of  this  particular  letter  that  went  to  the 
Senate.  However,  I have  a printed  quotation  of  the  letter,  which,  as 
I say,  was  read  into  the  Congressional  Record  by  Senator  Sherman 
on  January  21,  1921. 


MEAT  PACKER. 


489 


Mr.  Kincheloe.  Haven’t  you  that  here? 

Mr.  Durand.  I have  here  a copy  of  the  letter  as  read  by  Senator 
Sherman,  as  he  quoted  it. 

Mr.  Clarke.  Is  that  the  entire  letter  ? 

Mr.  Durand.  It  purports  to  be  the  entire  letter,  a correct  copy. 
I could  not  certify  to  that.  Senator  Sherman  says,  on  January  21, 
1921,  on  page  1748  of  the  Congressional  Record,  speaking  of  this 
letter;  it  is  addressed  to  the  Chief  of  the  Diplomatic  Bureau  of  the 
State  Department,  Washington,  D.  C.,  and  is  as  follows: 


It  is  requested  that  one  copy  of  the  Federal  Trade  Commission’s  summary  to  the 
report  of  the  meat-packing  industry  be  sent  through  the  proper  channels  to  the  head 
of  each  of  the  countries  listed  below: 

Great  Britain,  France,  Brazil,  Paraguay,  Panama,  Guatemala,  Italy,  Spain,  Chile* 
Mexico,  Cuba,  Switzerland,  Argentina,  Venezuela,  Uruguay,  Haiti,  Sweden,  Nor- 
way, Colombia,  Portugal,  and  Honduras. 

There  is  inclosed  a form  letter,  containing  ideas  the  commission  desires  to  convey 
to  the  recipients  of  this  report,  which  material  is  to  be  used  as  your  judgment  may 
direct. 

The  commission  appreciates  your  courtesy  in  taking  care  of  this  matter. 

Very  truly,  yours, 

Federal  Trade  Commission. 


And  then  Senator  Sherman  adds 

Mr.  Ten  Eyck.  What  was  the  date  of  that  letter  ? 

Mr.  Durand.  September  27,  1918,  and  I have  read  the  letter  as 
Senator  Sherman  quotes  it. 

Then  Senator  Sherman  adds : 

Here  is  the  form  letter  referred  to  which  I have  been  able  to  procure,  filled  out 
and  addressed  to  the  President  of  Switzerland.  It  is  dated  September  26,  1918, 
and  reads: 

Mr.  Thompson.  Who  was  that  addressed  to  ? 

Mr.  Durand.  The  foreign  governments. 

Mr.  Kincheloe.  That  is,  by  the  State  Department? 

Mr.  Durand.  This  was  following  a form  letter  to  the  State  Depart- 
ment. The  commission  does  not  know  whether  any  letter  was  sent 
out  by  the  State  Department  or  not. 

Mr.  Clarke.  It  is  in  the  record  last  night  that  it  got  into  the 
hands  of  the  Department  of  Agriculture  of  Greece. 

Mr.  Thompson.  That  was  testified  to  yesterday. 

Mr.  Kincheloe.  That  letter  seemed  to  be  complying  with  a 
request. 

Mr.  Lightfoot.  It  is  a summary  of  a report,  and  a copy  of  this 
summary  of  report  was  found  in  the  Department  of  Agriculture  of 
Greece  a short  time  after  the  date  of  this  letter.  It  was  assumed 
it  reached  there  through  the  channels,  having  been  sent  there  a short 
time  after  the  date  of  this  letter. 

Mr.  Thompson.  Is  there  any  evidence  to  show  that  that  letter  was 
transmitted  by  the  State  Department;  are  you  going  to  lead  up  to 
this  ? 

Mr.  Durand.  There  isn’t  any  here. 

Mr.  Thompson.  Have  you  any  knowledge  ? 

Mr.  Durand.  No,  sir. 

The  Chairman.  Would  you  prefer  to  conclude  your  reading? 

Mr.  Durand.  Yes;  I will  read  the  form  letter  inclosed  with  the 
letter  to  the  State  Department. 

The  Chairman.  Very  well;  then  we  will  have  the  whole  matter 
before  us. 


490 


MEAT  PACKER. 


Mr.  Durand.  This  is  the  form  letter  which  was  inclosed  in  the 
letter  to  the  Chief  of  the  Diplomatic  Bureau  of  the  State  Depart- 
ment, as  it  is  given  by  Senator  Sherman. 

It  is  dated  September  26,  1918,  and  reads: 


The  President, 

Switzerland. 


MEAT-PACKING  REPORT. 


Sir:  There  is  inclosed  herewith  a copy  of  the  summary  of  the  report  of  the  Federal 
Trade  Commission  on  the  meat  industry,  which  was  recently  released  for  publication 
by  President  Wilson,  and  which  may  be  of  interest  to  your  Government.  Two  copies 
have  also  been  sent  direct  to  the  legation  of  your  country  in  Washington. 

By  direction  of  the  commission  and  with  expressions  of  its  highest  esteem. 

Yours,  very  truly, 


Federal  Trade  Commission. 


Mr.  Kincheloe.  Is  the  letter  contained  in  the  summary  of  the 
Federal  Trade  Commission  the  thing  you  were  objecting  to  last 
night  ? 

Mr.  Lightfoot.  I did  not  get  your  question. 

Mr.  Kincheloe.  There  is  nothing  in  the  letter  there.  The  sum- 
mary of  the  Federal  Trade  Commission,  is  that  the  one  you  talked 
about  which  prejudiced  your  foreign  trade  ? 

Mr.  Lightfoot.  Yes;  I want  to  call  your  attention  to  the  fact 
that  the  summary  of  the  Federal  Trade  Commission,  before  these 
volumes  were  out,  six  or  seven  volumes,  published  a summary  of 
what  was  to  appear  more  at  length  in  these  other  volumes.  This 
summary  was  issued  in  June. 

Mr.  Durand.  July  3,  1918,  was  the  date,  but  it  was  not  released 
for  publication  until  about  August  8,  I think.  It  was  August  8. 

Mr.  Lightfoot.  At  that  time  all  of  these  six  or  seven  large  volumes 
had  not  been  published,  but  the  published  summary  contained  40 
or  50  or  more  pages;  I do  not  remember  how  many.  In  this  sum- 
mary they  gave  an  outline  of  what  was  to  appear  when  these  other 
volumes  and  the  letter  of  transmission  to  the  President,  as  well  as 
this  summary  charged  that  the  five  packers  had  created  a monopoly. 

Mr.  Kincheloe.  What  I am  getting  at  is  if  it  was  the  summary 
rather  than  the  letter  from  the  State  Department  that  militated 
against  you  ? 

Mr.  Lightfoot.  No;  you  misunderstood  me.  I said  this  summary 
of  the  Federal  Trade  Commission  contained  what  we  considered 
damaging  statements  in  relation  to  these  packers,  and  contained 
gratuitous  statements  with  reference  to  our  foreign  trade,  and  they 
stated  that  the  monopoly  was  going  to  involve,  unless  controlled  in 
this  country — involve  this  country  in  international  complications  of 
some  kind.  And  all  those  damaging  statements,  the  Federal  Trade 
Commission  appear  to  have  prepared  voluntarily,  because  there  is 
nothing  in  the  correspondence  to  show,  or  in  letters  that  they  list, 
any  request  from  the  President  of  Switzerland,  or  the  Queen  of 
Holland,  or  the  presidents  of  the  South  American  republics,  for  this 
summary.  And  you  will  notice  this  document  is  headed,  or  dated, 
the  26th  of  September,  a little  more  than  a month  after  the  time  it 
was  released  for  publication. 

Now,  our  contention  was  that  all  of  these  circumstances  showed 
that  the  Federal  Trade  Commission  had  voluntarily  sent  the  sum- 
mary of  their  report  to  the  heads  of  these  different  governments. 


MEAT  PACKER. 


491 


In  order  that  it  might  go  through  proper  channels  to  the  heads  of 
the  governments  named,  they  addressed  a letter  to  the  Secretary 
of  State,  that  letter  which  Mr.  Durand  just  read,  requesting  the  Secre- 
tary of  State  to  transmit  the  summaries  to  these  different  heads  of 
the  different  governments,  and  inclosing  a form  letter  to  be  used 
by  the  Secretary  of  State  in  transmitting  it  into— 

Mr.  Durand  (interposing).  May  I say  right  there,  I think  that  form 
letter  probably  was  not  a form  letter  to  be  signed  by  the  Secretary 
of  State.  I assume  the  idea  was  that  the  letter  should  be  signed 
“ Federal  Trade  Commission,”  and  that  it  was  sent  to  the  State 
Department  simply  that  it  might  be  transmitted  through  the  State 
Department  mail  pouches,  and  the  suggestion  was  made  in  the 
letter  that  the  “ material  is  to  be  used  as  your  judgment  may  direct.” 

Possibly  this  was  not  a correct  form  letter,  and  they  might  wish 
to  amend  the  form  letter.  I think  the  idea  was  that  the  form  letter 
was  to  be  signed  by  the  Federal  Trade  Commission  rather  than  by 
the  State  Department. 

Mr.  Lightfoot.  There  is  nothing  in  the  correspondence  itself  to 
disclose  that.  You  are  left  to  draw  your  own  conclusions.  In  the 
beginning  of  this 

Mr.  Durand  (interposing).  I am  just  stating  that. 

Mr.  Lightfoot.  It  was  left  to  the  Secretary  of  State.  There  is 
nothing  suggested  about  who  was  to  sign  it;  and  I suppose  he  sent  it 
through  diplomatic  channels  as  was  suggested. 

Mr.  Voigt.  That  is  not  so,  for  the  reason  that  the  form  letter 
which  is  read  is  signed  by  the  Federal  Trade  Commission. 

Mr.  Lightfoot.  It  is  not  signed  at  all. 

Mr.  Durand.  Yes;  the  form  letter  is. 

Mr.  Veeder.  The  form  letter  in  the  copy  here  is.  Apparently 
they  intended  to  send  it  to  these  governments,  but  did  not  intend  to 
ask  the  State  Department  to  sign  it,  but  simply  suggested  the  form 
in  which  it  should  go. 

Mr.  Kincheloe.  Let  me  ask  you— — - 

Mr.  Lightfoot  (interposing).  May  I make  this  statement:  I had 
not  read  these  things  for  some  time. ' I want  to  correct  my  state- 
ment or  the  inference  that  it  was  intended  that  the  Secretary  of  State 
sign  it. 

Mr.  Kincheloe.  I got  the  impreesion  from  your  statement  last 
night  that  it  was  the  letter  from  the  State  Department  to  those 
foreign  governments  that  stated  these  things,  and  because  of  the  fact 
that  it  being  signed  by  the  State  Department  gave  it  official  status. 
Now  I understand  that  the  only  thing  that  went  over  there  probably 
was  damaging — I am  not  saying  that — but  that  it  was  only  excerpts 
from  the  Federal  Trade  Commission’s  report,  and  not  a letter  from  the 
State  Department. 

Mr.  Lightfoot.  Probably  you  are  correct,  in  view  of  my  failure  to 
recollect  how  it  was  signed.  I have  not  read  it  for  a long  time,  and 
this  thing  came  up  in  a minute.  I was  speaking  from  memory. 
I will  say  this : That  to  the  extent  that  you  got  the  impression,  or  the 
record -shows  that  we  were  prejudiced  by  any  letter  of  the  Secretary 
of  State  reaching  these  governments 

Mr.  Kincheloe  (interposing).  It  mpressed  me  very  much,  because 
any  letters  with  the  signature  of  the  Secretary  of  State  reflects  very 
much  the  influence  of  this  Government. 


492 


MEAT  PACKER. 


Mr.  Lightfoot.  Yes;  but  I will  add  this,  which  is  as  vital  as  though 
it  was  signed  by  the  Secretary  of  State : The  Federal  Trade  Commis- 
sion, being  a governmental  agency,  the  possibility  that  the  letter  was 
signed  by  it,  it  would  not  have  so 

Mr.  Kincheloe  (interposing).  I do  not  think  that  one  foreigner 
in  a thousand  knows  anything  about  the  Federal  Trade  Commission. 

Mr.  Lightfoot.  Foreign  governments  know  about  it  now. 

Mr.  Veeder.  This  was  sent  out  by  the  Federal  Trade  Commission. 

The  very  language  of  it  here — it  says  in  this  form  letter  to  be  sent 
out: 

Sir:  There  is  inclosed  herewith  a copy  of  the  summary  of  the  report  of  the  Federal 
Trade  Commission  on  the  meat  industry,  which  was  recently  released  for  publication 
by  President  Wilson,  and  which  may  be  of  interest  to  your  Government. 

Mr.  Durand.  May  I explain  that  matter  a moment  ? 

Mr.  Ten  Eyck.  Let  me  interpose  one  question:  Last  night  the 
statement  was  made  that  this  pamphlet  was  picked  up  in  the : 

Mr.  Lightfoot  (interposing).  In  the  Department  of  Agriculture 
of  Greece. 

Mr.  Ten  Eyck.  In  the  Department  of  Agriculture  of  Greece. 
Undoubtedly  it  was  damaging,  but  the  gentleman  himself,  Mr. 
Lightfoot,  remarked  that  he  did  not  see  a letter  accompanying  it, 
and  therefore  he  did  not  know  whether  it  was  sent  out  by  the  Secre- 
tary of  State  or  the  Trade  Commission  or  anyone  else;  that  it  was 
merely  the  pamphlet  that  he  saw.  I am  not  taking  the  position  that 
it  was  not  sent  out. 

Mr.  Kincheloe.  I got  the  idea  that  it  was  picked  up  in  Greece, 
this  summary  of  the  report  of  the  Federal  Trade  Commission,  accom- 
panied by  a letter  of  the  Secretary  of  State. 

Mr.  Lightfoot.  No;  if  you  read  that,  you  will  find  I did  not  make 
that  statement. 

Mr.  Durand.  Mr.  Chairman,  may  I make  a statement  in  that 
connection  ? This  will,  I think,  clear  up  that  letter. 

Mr.  Kincheloe.  What  I am  talking  about  is  what  I think  Mr. 
Lightfoot  said  last  night. 

Mr.  Ten  Eyck.  I would  like  to  have  Mr.  Lightfoot  answer  that 
question,  or  if  my  assertion  is  correct. 

Mr.  Lightfoot.  Let  me  state  it  correctly.  No  one  is  interested 
in  having  here  a misconception.  It  seems  we  are  making  a big 
point  about  who  the  letter  was  signed  by.  I don’t  think  it  is  ma- 
terial. The  point  I was  trying  to  make  was  that  the  report  got 
over  there  voluntarily  through  the  action  of  the  Federal  Trade 
Commission,  without  request,  apparently,  for  the  documents,  from 
the  presidents  and  kings  and  queens  of  those  countries.  And  it  is 
a fact  that  it  was  transmitted  by  the  State  Department,  the  diplo- 
matic channel,  directly  to  the  heads  of  these  governments.  It  was 
more  certain  to  bring  it  to  the  attention  of  the  persons  to  whom  it 
was  addressed.  The  further  fact  that  the  form  letter  carried  the 
inference  that  it  was  being  transmitted  at  the  request  of  the  Presi- 
dent would  prove  damaging. 

Mr.  Ten  Eyck.  Did  you  find  a copy  of  this  letter,  or  do  you 
know  that  there  was  a copy  of  this  letter  sent  ? 

Mr.  Lightfoot.  I have  no  knowledge  whether  any  letter  was 
sent  or  not,  but  I do  know  that  a representative  of  one  of  the  largest 
packers  happened  to  visit  the  department  of  agriculture  of  Greece 


MEAT  PACKER. 


493 


a short  time  after  that  and  upon  making  himself  known,  the  official 
said,  “Yes,  I know  who  you  are;  I have  a report  telling  me  who 
you  are.” 

Mr.  Kincheloe.  Right  there,  if  I got  the  wrong  impression,  I 
want  to  be  corrected.  You  repeated  that  last  night,  and  I under- 
stood you  to  say  it  was  not  only  excerpts  of  the  Federal  Trade  Com- 
mission’s report,  but  I understood  you  to  say  in  order  to  add  color 
to  the  authenticity,  that  it  was  accompanied  by  a letter  signed  by 
the  State  Department  of  the  United  States  of  America. 

Mr.  Lightfoot.  Well,  I had  reference  to  this — I do  not  think  I 
used  the  words  you  used.  I meant  that  the  form  letter — if  I said 
accompanied  by  the  letter,  I assumed  that  the  Secretary  of  State 
used  the  letter,  because  it  requested  to  be  used,  and  if  the  Secretary 
of  State  transmitted  the  document,  although  it  was  optional  what 
part  of  the  form  letter  they  used,  I assumed  it  accompanied  the 
document  when  transmitted. 

Mr.  Kincheloe.  From  the  State  Department? 

Mr.  Lightfoot.  Yes;  they  would  not  have  put  the  report  in  an 
envelope  without  some  letter  and  sent  it  there. 

Mr.  Ten  Eyck.  Did  you  ever 

Mr.  Lightfoot  (interposing) . I am  trying  to  answer  his  point. 
If  the  letter  with  the  summary  was  transmitted  to  the  President 
of  Switzerland,  say,  the  inference  that  I draw — that  it  was  being 
transmitted  at  the  suggestion  of  the  President — would  have  been 
a very  important  matter  which  would  probably  have  caused  the 
President  of  Switzerland  to  have  looked  at  it  and  read  it  personally. 
In  other  words,  his  secretary  would  likely  have  placed  it  in  his 
hands. 

Mr.  Kincheloe.  Excuse  me,  I did  not  know  the  word  “Presi- 
dent” was  in  it  at  all.;; 

Mr.  Lightfoot.  Yes,  sir. 

Mr.  Kincheloe.  If  this  was  transmitted  in  the  form  letter  by 
the  Federal  Trade  Commission,  not  one  foreigner  in  a thousand 
would  know  the  Federal  Trade  Commission,  but  if  it  was  transmitted 
from  the  President,  or  if  it  went  through  the  State  Department, 
they  would  know  it. 

Mr.  Lightfoot.  If  I said  that,  it  was  a misapprehension. 

Mr.  Thompson.  The  very  fact,  Mr.  Lightfoot,  that  it  was  trans- 
mitted through  the  agency  of  the  State  Department  would  give  it 
credit  with  the  foreign  governments. 

Mr.  Lightfoot.  That  was  my  impression. 

Mr.  Thompson.  Would  give  it  a kind  of  official  standing  ? 

Mr.  Lightfoot.  Yes. 

Mr.  Charles  A.  Lyman.  It  seems  to  me,  Mr.  Chairman,  the  im- 

gortant  thing  here  is  whether  the  summary  of  the  Federal  Trade 
ommission  is  truthful  or  not.  Now,  has  that  been  discussed  here 
this  afternoon? 

Mr.  Clarke.  I would  like  to  know  whether  you  are  acting  as 
chairman  of  this  meeting  or  the  gentleman. 

The  Chairman.  Go  ahead. 

Mr.  Durand.  In  reference  to  the  matters  raised  by  Mr.  Lightfoot 
and  Mr.  Veeder,  I would  like  to  say  that  this  list  of  countries  to  which 
the  Secretary  of  State  was  asked  to  transmit  the  report  does  not 
include  Greece;  Greece  is  not  in  the  list  of  the  countries  here. 


494 


MEAT  PACKER. 


I think  it  is  fair  to  assume  that  the  report  couldfhave  gotten  to 
Greece  in  many  other  ways  than  through  this  letter.  I would  like, 
further,  to  say  that  it  is  my  clear  impression  from  this  letter  here  that 
no  letter  signed  by  the  Secretary  of  State  accompanied  any  reports 
that  were  sent  out.  I have  no  record,  of  course,  that  any  reports 
were  sent  out.  The  State  Department  was  requested  to,  and  was 
furnished  the  form  letter  to  be  signed  by  the  Federal  Trade  Com- 
mission, so  I would  say  that  the  State  Department  did  not  sign  any 
letter. 

Mr.  Kincheloe.  Are  you  a member  of  the  Federal  Trade 
Commission  ? 

Mr.  Durand.  I am  not;  I am  an  employee. 

Mr.  Kincheloe.  You  did  not  conduct  any  of  these  hearings  ? 

Mr.  Durand.  Against  the  packers  ? 

Mr.  Kincheloe.  Against  the  packers  ? 

Mr.  Durand.  No,  sir. 

Mr.  Kincheloe.  You  are  not  a member  at  all? 

Mr.  Durand.  I am  an  employee. 

Mr.  Ten  Eyck.  Isn’t  it  the  duty  and  the  privilege  of  the  Federal 
Trade  Commission  to  send  pamphlets  broadcast  throughout  the 
country  and  to  foreign  countries  or  governments  that  will  promote 
trade  in  this  country — is  that  not  one  of  their  duties  ? 

Mr.  Durand.  They  are  given  the  duty  under  the  law  to  publish 
such  parts  of  the  information  they  get  as  they  deem  in  the  public 
interest  or  such  reports  as  they  make,  and  send  them  out. 

Mr.  Ten  Eyck.  To  promote  trade  ? 

Mr.  Durand.  That  is  not  stated  in  the  law.  They  are  simply 
given  discretion  to  make  public  the  information  that  they  desire  to 
report. 

Mr.  Ten  Eyck.  Not  answering  for  the  commission  itself,  but  do 
you  think  that  this  document  would  promote  trade  or  help  the 
farmers  or  the  packers  or  anyone  else  in  this  country — an  article  of 
this  kind — if  placed  in  the  hands  of  the  officials  of  other  governments  ? 

Mr.  Durand.  I don’t  think  that  it  would  injure  the  general  trade 
of  this  country. 

Mr.  Ten  Eyck.  I asked  you  if  it  would  promote  it — business  in 
this  country. 

Mr.  Durand.  I don’t  see  that  it  would  have  any  effect  on  it  at  all. 

Mr.  Ten  Eyck.  In  other  words,  you  admit  that  your  reports  do 
not  amount  to  anything  ? 

Mr.  Durand.  The  purpose  of  the  Federal  Trade  Commission,  as 
set  forth  in  its  organic  act,  does  not  include,  as  I recall,  a requirement 
or  a statement  of  a purpose  to  promote  trade.  As  I understand  it, 
that  is  the  purpose  of  the  Department  of  Commerce  and  the  Depart- 
ment of  Agriculture.  But  the  Federal  Trade  Commission  is  a body 
for  the  regulation  of  trade,  in  a way;  that  is,  acting  as  sort  of  a 
policeman  to  watch  the  methods  of  unfair  competition,  to  investigate 
industries  and  to  make  report. 

Mr.  Ten  Eyck.  And  to  protect  other  nations  by  undue  discussions 
of  our  manufactures  ? 

Mr.  Durand.  We  simply  make  public  facts,  whatever  they  are. 

Mr.  Ten  Eyck.  Do  you  send  to  foreign  countries  all  of  your 
publications  ? 


MEAT  PACKER.  495 

Mr.  Durand.  All  of  our  publications,  as  I understand,  go  to  the 
foreign  countries  through  a regular  convention 

Mr.  Ten  Eyck  (interposing).  Is  it  your  policy  to  send  out  your 
reports  as  you  sent  out  this  report  ? 

Mr.  Durand.  No;  I wotild  not  say  that  is  a policy.  I would  like 
to  say  that  the  sending  out  of  reports  at  the  commission  is  a routine 
matter.  It  is  not  a matter  that  the  commissioners  give  attention 
to  personally.  It  is  handled  by  our  Division  of  Publications. 

Mr.  Ten  Eyck.  The  reports  sent  out  in  a routine  way  would  go 
through  the  regular  channels  established  for  that  purpose.  Now, 
this  report  went  through  a different  channel? 

Mr.  Durand.  May  1 continue?  I was  explaining,  that  on  occa- 
sions there  are  reports  sent  out  voluntarily  by  the  commission. 
When  a man  who  has  had  charge  of  an  investigation  reaches  a period 
when  the  report  is  about  to  be  issued,  he  is  very  likely  to  look  over 
the  mailing  list  and  say,  “Here  are  people  that  gave  us  information; 
people  that  are  very  much  concerned  with  this;  and  we  ought  to 
send  a copy  of  the  report  as  a matter  of  courtesy  to  them/’  and  a 
few  reports  are  sent  out  that  way;  not  many.  Ordinarily  the 
mailing  list  is  the  mailing  list  of  responses  to  requests  for  the  reports 
plus  the  regular  routine  distribution,  part  of  which  is  the  distribution 
to  the  foreign  countries  by  this  convention  through  the  Smithsonian 
Institute. 

Mr.  Ten  Eyck.  Do  you  receive  reports  from  other  countries  ? 

Mr.  Durand.  We  receive  manjr  reports  from  other  countries. 

Mr.  Ten  Eyck.  Have  you  ever  received  a report  saying  they  had 
monopolies  of  the  things  they  produce  and  consume  ? 

Mr.  Durand.  I could  not  answer  that;  we  receive  hundreds  of 
reports— — 

Mr.  Voigt  (interposing).  Isn’t  it  a fact  that  these  copies  were  sent 
to  the  heads  of  these  Governments  through  the  Department  of  State 
in  order  to  save  postage  ? 

Mr.  Durand.  As  I recall  that  matter — that  is  very  dim  in  my 
recollection,  but  as  I recall  there  were  a number  of  requests  received 
by  us  at  the  commission  for  copies  of  this  report  before  it  was  ready, 
from  foreign  countries,  and  that  when  we  were  about  to  send  out 
the  report  and  I knew  that  it  was  to  be  issued  and  sent,  that  I took 
it  up  with  the  head  of  the  Division  of  Publications  and  suggested 
that  we  had  better  send  out  these  reports.  It  was,  I think,  my 
knowledge  that  we  had  received  a number  of  requests  for  these 
reports;  that  there  was  a desire  for  information  so  far  as  the  packers 
were  concerned;  and  that  we  had  received  information  from  other 
countries.  Great  Britain  had  investigated  the  packers,  and  we  had 
used  their  reports.  Argentina  had  investigated  the  packers,  and  we 
had  made  a study  of  their  reports.  Australia  had  done  the  same 
thing.  The  Division  of  Publications  man,  I remember,  said  he  did 
not  know  what  form  to  use.  I think  I suggested  that  we  draft  a 
little  form  and  send  it  to  the  State  Department,  and  if  they  did  not 
like  it  they  could  change  it.  That  is  all  I remember.  I do  not  think 
any  of  the  commissioners  passed  on  that  question  at  all. 

Mr.  Ten  Eyck.  You  don’t  think  that  is  damaging  at  all  to  our 
export  trade  ? 

Mr.  Durand.  I do  not  regard  the  truth  as  damaging.  We  simply 
tried  to  set  forth  the  facts  there. 


496 


MEAT  PACKER. 


Mr.  Kincheloe.  How  do  you  know  anything  about  the  truth  of 
this  personally,  when  you  were  not  a member  of  the  Federal  Trade 
Commission  and  were  not  present  and  did  not  know  anything  about 
the  facts  ? 

Mr.  Durand.  Possibly  I have  misled  you.  I was  an  employee 
of  the  commission  from  the  time  when  the  investigation  was  made, 
and  during  part  of  the  time  was  deputy  examiner  in  charge  of  the 
investigation  and  during  a part  of  the  time  was  the  examiner  in 
charge  of  it.  You  asked  me,  as  I understood,  regarding  the  public 
hearings.  I was  not  out  in  the  field  and  did  not  conduct  any  of  the 
public  hearings.  I attended  only  one  of  the  hearings 

Mr.  Kincheloe.  Do  you  know  why  a member  of  the  Federal  Trade 
Commission  did  not  come  here  in  response  to  a resolution  we  passed 
last  night  ? 

Mr.  Durand.  The  letter  asked  them  to  send  a representative  here. 

Mr.  Kincheloe.  I understood,  Mr.  Ten  Eyck,  your  resolution  was 
to  send  a member. 

Mr.  Ten  Eyck.  No;  a representative  to  advise  us. 

There  was  one  other  request  in  that,  and  that  was  the  reason  why 
they  sent  it  out. 

Mr.  Durand.  I have  just  given  you  the  information.  I suppose 
I and  the  head  of  the  Division  of  Publications  were  the  only  men  who 
had  anything  to  do  with  it. 

Mr.  Ten  Eyck.  What  was  your  reason  ? 

Mr.  Durand.  As  I said,  we  had  received  various  requests  for  this 
report,  and  we  had  secured  from  other  countries  the  reports  which 
their  investigating  bodies  had  previously  made  concerning  the 
packers,  and  we  were  putting  into  our  report  the  results  of  these 
foreign  investigations,  and  it  seemed  to  be  a somewhat  natural 
thing.  I certainly  did  not  proceed  with  any  purpose  or  anything 
in  my  mind  to  injure  the  foreign  trade  of  the  packers. 

Mr.  Ten  Eyck.  In  other  words,  it  was  the  way  you  went  about  it; 
now  you  say  you  sent  them  out  on  account  of  the  requests  you 
had  received? 

Mr.  Durand.  I had  received  some  requests. 

Mr.  Clarke.  How  did  these  requests  come  for  this  report? 

Mr.  Durand.  On  account  of  the  publicity  that  attended  the  public 
hearings  held,  beginning  December,  1917. 

Mr.  Clarke.  Could  you  furnish  this  committee  with  any  copies 
of  requests  prior  to  the  date  of  this  letter? 

Mr.  Durand.  Yes,  sir. 

Mr.  McLaughlin  of  Nebraska.  Will  you  answer  a little  question? 
You  can  answer  yes  or  no:  A great  deal  has  been  said  about  the 
sending  out  of  this  pamphlet,  and  there  has  been  a good  deal  of 
censure,  either  real  or  implied.  I ask  you  if  it  is  not  a fact  that 
every  department  of  this  Government,  and  every  other,  sends,  as  a 
matter  of  courtesy,  to  every  Government  all  the  bulletins  and  have 
done  it  from  time  immemorial,  and  there  is  nothing  strange  about  it 
at  all;  isn’t  that  a fact  ? 

Mr.  Ten  Eyck.  Not  so  much  the  sending,  but  it  was  the  reason 
for  it,  and  to  get  into  the  record  the  reason  why  it  was  sent  out. 
But  there  was  an  assertion  made  here  last  night  that  the  report  was 
sent  out  by  the  Secretary  of  State  with  a letter  signed  by  him  with 
the  President’s  name  in  one  of  the  other  letters,  connecting  it  ud 


MEAT  PACKER. 


497 


directly  with  the  Government,  and  we  have  found  now  that  they 
went  out  through  an  unusual  channel  for  reports  of  this  char- 
acter; not  through  the  channels  that  you  are  talking  about,  but 
this  is  an  unusual  channel,  and  was  certainly  an  unusual  way  to  take 
to  send  this  particular  report  out.  Now,  I want  every  man  in  the 
United  States,  if  this  report  is  true,  to  have  this  report,  but  I do  not 
see  why  we  should  take  an  unusual  way  to  inform  consumers  on  the 
outside  in  other  or  foreign  countries  about  some  differences  we  may 
have  with  our  producers,  manufacturers,  and  corporations. 

Mr.  McLaughlin  of  Nebraska.  I think  you  will  find  out  on  in- 
vestigation that  it  is  not  an  unusual  way  of  sending  them  out. 

Mr.  Durand.  May  I answer  the  question  whether  we  had  any 
requests  ? 

Mr.  Clarke.  Yes. 

Mr.  Durand.  On  page  37,  of  the  hearings  in  the  Senate  Committee 
on  Agriculture  and  Forestry,  on  S.  2199  and  S.  2202,  part  1 — this  is 
the  set  of  hearings  entitled  “ Stimulation  of  Live  Stock  Products’’ — 
on  the  Kenyon  and  Kendrick  bills.  On  page  37,  of  part  1,  you  have 
this  statement  by  Mr.  Colver  in  his  testimony:  That  New  Zealand 
officials  and  general  public  were  thinking  on  this  subject — that  is,  on 
the  subject  of  the  meat  packers — as  early  as  December  6,  1917,  and 
before  the  Federal  Trade  Commission  had  written  any  summary,  or 
could  have  sent  any  summary  out  or  given  out  anything  on  this 
subject.  It  was  before  the  date,  even,  I think,  of  the  first  hearing 
by  Mr.  Heney,  which  was  later  in  December  than  December  6; 
certainly  no  news  had  reached  New  Zealand  at  that  date. 

Now,  Consul  General  Alfred  A.  Winslow,  the  American  consul 
general  at  Auckland,  New  Zealand— — 

Mr.  Lightfoot  (interposing).  May  I ask  a question:  At  the  time 
and  just  before  the  date  referred  to  there,  which  you  just  read,  the 
Federal  Trade  Commission  had  been  having  very  sensational  hear- 
ings, the  Heney  hearings,  and  the  newspapers  were  full  of  it. 

Mr.  Durand.  Those  were  after  the  date  of  December  6. 

Mr.  Lightfoot.  After  that? 

Mr.  Durand.  Yes,  sir. 

Mr.  Lightfoot.  Had  had  no  public  hearings  before  December  6 ? 

Mr.  Durand.  I think  not.  The  hearings,  as  I recall 

Mr.  Lightfoot  (interposing) . I am  not  certain  of  it. 

Mr.  Durand.  The  hearings,  as  I recall,  were  later  in  December. 
The  first  Heney  hearing  was  December  20,  1917. 

Let  me  read  this.  There  is  a little  question  here,  and  this  will 
clear  it  up.  Consul  General  Alfred  A.  Winslow,  at  Auckland,  New 
Zealand,  wrote,  under  date  of  December  6,  1917,  a report  which  he 
transmitted  to  the  State  Department,  and  which  the  State  Depart- 
ment transferred  to  the  Federal  Trade  Commission,  which  is  custom- 
ary. The  heading  is:  “New  Zealand  meat  industry.”  And  then 
he  says  as  follows  (Senate  Committee  on  Agriculture,  hearings  on 
Stimulation  of  Live  Stock  Products,  pt.  1,  p.  37) : 

I have  the  honor  to  report  that  the  meat  producers  of  New  Zealand  are  quite 
seriously  disturbed  because  of  what  they  fear  the  American  Meat  Trust,  as  they  call 
it,  may  have  over  the  future  export  of  fresh  meat  from  this  country. 

It  is  being  discussed  at  meetings  of  farmers’  cooperative  associations,  by  the  freez- 
ing companies,  and  even  in  Parliament,  as  may  be  seen  from  the  inclosed  clippings 

46985—21 82 


498 


MEAT  PACKER. 


taken  from  the  Auckland  Star  of  October  30  and  November  22  and  New  Zealand 
Herald  of  October  25,  leading  dailies  of  this  city. 

In  this  connection  it  might  be  well  to  understand  that  Armour  & Co.  have  an 
agent  at  Christchurch  to  represent  their  interests  in  New  Zealand,  who  has  been 
somewhat  active  along  his  line,  but  in  conference  with  him  sometime  since  when 
he  called  at  this  consulate  general  he  denied  that  his  company  had  any  idea  of 
attempting  to  dominate  the  meat  business  of  this  part  of  the  world.  He  stated  that 
they  were  here  simply  to  look  after  their  interests  in  general  and  were  prepared  to 
buy  stock  that -seemed  to  appeal  to  the  trade  in  general. 

. However,  the  people  of  New  Zealand  are  very  jealous  of  their  interests,  and  very 
rightly  so,  for  they  have  an  exceedingly  bright  future  if  the  grazing  industry  is  allowed 
to  have  its  way,  and  not  be  dominated  by  any  faction  or  cooperation  associations 
without  any  apparent  head  or  national  organization  that  is  attempting  to  control  meat 
prices,  so  that  competition  is  open  and  above  board,  and  good  prices  prevail,  and  did 
so  before  the  war. 

It  is  thought  these  matters  might  be  of  interest  to  the  departments,  and  should 
they  be  of  further  interest  I shall  be  glad  to  follow  up  this  report,  if  I am  so  informed. 

I have  the  honor  to  be,  sir,  your  obedient  servant, 

Alfred  A.  Winslow, 

American  Consul  General. 

Then  following  are  the  articles  he  inclosed  with  this  report,  which 
cover  four  or  five  pages  of  the  Senate  committee’s  record  at  this  point. 

Now,  may  I say  further,  to  answer  that  question  more  specifically, 
there  is  listed  in  the  reply  of  the  commission  to  the  Sherman  resolu- 
tion the  requests  from  New  Zealand  for  copies  of  the  report. 

Mr.  Ten  Eyck.  So  far  as  I am  concerned,  that  is  sufficient.  I want 
to  make  a statement  here. 

Mr.  Durand.  I want  to  say,  in  general,  that  before  the  date  of  our 
first  hearings — well,  I might  say  further,  that  early  in  1917  the  New 
Zealand  Government  appointed  a committee  to  investigate  the 
packers  and  packing  situation  in  New  Zealand;  that  on  October  25, 
1917,  that  committee  made  a report,  and  that  report  included  one 
finding  regarding  the  American  meat  packers,  expressing  great  fear 
of  domination  that  might  occur  in  that  country,  and  the  report 
recommended  that  licenses  be  required  of  all  freezing  companies  or 
meat-exporting  companies.  That,  you  see,  was  prior  to  our  hearings. 

Consul  General  Winslow,  as  I recall  it,  transmitted  to  the  State 
Department  a request  from  the  head  of  the  Department  of  Agricul- 
ture of  New  Zealand  requesting  that  copies  of  the  Federal  Trade 
Commission’s  report  on  the  meat  investigation  should  be  mailed  to 
him;  three  copies  were  requested.  And  that  was,  evidently,  in 
response  to  news  that  had  come  to  him  of  the  Heney  hearings.  It 
was  not  until  many  months  afterwards  that  the  report  was  actually 
issued  and  mailed. 

Mr.  Ten  Eyck.  I think  you  have  made  this  very  clear,  and  I wish 
to  make  this  statement:  I have  no  brief  for  the  packers,  no  animosity 
against  the  Federal  Trade  Commission,  but  I have  an  interest  in  the 
producing  part  of  this  country,  and  anything  that  is  being  done  to 
hurt  the  producers  of  this  country  through  any  medium  of  the 
Government,  why,  I want  to  know  about  it,  and,  if  possible,  correct  it. 

Mr.  Durand.  May  I say,  in  regard  to  the  matter  Mr.  Veeder  men- 
tioned, which  should  be  cleared  up:  He  mentioned  this  form  letter 
as  containing  a phrase  about  the  President  of  the  United  States;  as 
if  the  report  was  released  by  the  President  of  the  United  States.  That 
was  in  that  letter,  and  here  is  how  it  happened  to  be  in  that  form 
letter.  The  report,  if  you  recall,  is  dated  July  3,  1918.  That  was 
the  date  on  which  it  was  sent  to  the  President.  The  President  held 


MEAT  PACKER. 


499 


it  until  some  time  in  August — August  8 — and,  consequently,  after 
j the  report  was  finally  released  by  the  President,  any  letters  accom- 
panying copies  of  the  report  sent  out,  said  that  the  report  was  re- 
leased by  the  President  on  August  8,  to  explain  why  they  had  not 
got  it  early  in  July  since  it  was  dated  July  3.  That  is  why  we  said 
in  this  same  form  letter  “ recently  released  by  the  President.” 

Mr.  Ten  Eyck.  It  is  a matter  of  fact,  the  President  does  not 
read  these  reports  ? 

Mr.  Durand.  As  a matter  of  fact,  we  think  that  he  did  read  this. 
What  you  say  may  be  ordinarily  true,  but  we  think  that  he  did  read 
this.  I have  heard  that  he  did.  He  kept  it  from  July  3 to  the  8th 
of  August. 

Mr.  Voigt.  Let  me  ask  you:  If  you  had  sent  these  reports  to  the 
foreign  Governments  by  ordinary  mail,  you  would  have  had  to  pay 
postage  on  them,  would  you  not  ? 

Mr.  Durand.  I do  not  know,  Congressman,  about  that  detail, 
whether  we  would  have  to  or  not.  We  frequently  send  reports  to 
foreign  countries,  or  letters  that  we  want  to  send  to  foreign  countries 
in  that  way,  i.  e.,  through  the  State  Department  mail  pouches,  as  a 
safer  and  more  convenient  way. 

Mr.  Voigt.  I understand,  but  if  you  had  not  adopted  that  method 
you  would  have  had  to  pay  postage,  and  by  sending  it  through  the 
department,  it  goes  under  the  frank  of  the  Secretary. 

Mr.  Durand.  I am  not  informed  about  that. 

Mr.  Voigt.  Let  me  ask  you : Did  you  sometimes  send  other  matter, 
other  publications,  as  this  was  sent  ? 

Mr.  Durand.  Oh,  yes,  frequently;  particularly  during  the  war, 
that  was  done  in  the  departments  generally,  because  it  was  thought 
the  safest  way  to  send  documents  during  the  war. 

Mr.  Voigt.  Then  this  was  sent  out  as  routine,  as  other  publica- 
tions are  sent  out? 

Mr.  Durand.  Yes;  except  it  was  not  regular  to  send  out  reports 
to  so  many  countries,  except  by  exchange,  and  they  are  sent  through 
the  Smithsonian  Institute.  It  was  routine  matter  in  the  sense  that 
it  was  not  commission  policy  at  all. 

Mr.  Voigt.  Then  no  member  of  the  commission  ordered  those 
copies  to  be  sent  out  ? 

Mr.  Durand.  They  have  assured  me  they  did  not  know  anything 
about  this  letter — never  saw  it. 

Mr.  Veeder.  May  I make  a brief  statement  on  this?  In  sub- 
stance, of  course,  they  had  no  knowledge  of  the  facts,  Mr.  Durand 
has  just  stated.  What  occurred  and  what  we  first  thought  was  that 
we  were  being  handicapped  and  legislated  against  in  these  foreign 
countries.  I wish  to  read  into  the  record  a letter  which  was  addressed 
to  Armour  & Co.  of  Australia  by  the  office  of  the  minister  of  agricul- 
ture, which  revoked  their  license  to  engage  in  the  export  trade  from 
New  Zealand.  It  revoked  their  license  and  it  says  it  is  based  on  the 
report  of  the  Federal  Trade  Commission.  This  letter  is  quoted  by 
Senator  Sherman  in  the  Senate,  and  will  be  found  on  page  2228  of 
the  Congressional  Record  of  February  27,  1921.  It  is  dated  Feb- 
ruary 24,  1919.  This  is  the  same  matter  that  was  referred  to  yester- 
day or  last  night.  Armour  & Co.  had  a plant  in  New  Zealand  and 
was  engaged  in  the  slaughtering  of  live  stock  and  exporting  meat. 
Under  the  statutes  of  New  Zealand  it  is  necessary  for  an  export 


500 


MEAT  PACKER. 


company  to  take  out  a license.  That  license  is  renewable  each  year. 
On  December  19,  1918,  Armour  & Co.  applied  for  their  renewal 
license.  They  had  heretofore  been  operating,  and  had  from  year  to 
year  had  their  license.  The  reply  they  received  is  this: 

Office  of  Minister  of  Agriculture, 

Wellington , February  24,  1919. 

Messrs.  Armour  & Co.  of  Australasia  (Ltd.),  Christchurch. 

Dear  Sirs:  The  director  general  of  the  department  has  submitted  to  me  your 
letter  of  the  17th,  in  which  you.  formally  apply  for  the  issue  to  you  of  a meat-export 
license  under  the  slaughtering  and  inspection  amendment  act  of  1918.  I regret  to 
inform  you  that  I can  not  grant  this  license.  This  decision  has  Teen  arrived  at  after 
the  perusal  of  the  official  summary  of  the  report  uf  the  Federal  Trade  Commission  on 
the  meat-packing  industry  appointed  by  the  ITnited  States  Government.  With 
reference  to  the  canned  meat  referred  to  in  your  letter  of  the  8th  instant  as  having 
been  already  purchased,  this  meat  may  be  shipped  bv  you,  and  no  action  will  be  taken 
against  you  in  respect  of  its  shipment. 

Yours,  faithfully, 

W.  D.  S.  MacDonald. 

The  license  has  never  since  been  granted. 

Now,  the  Board  of  Trade  of  Great  Britain  and  Parliament  have  at 
different  times  appointed  committees  to  investigate  combinations  • 
in  restraint  of  trade,  and  these  committees  have  reported  at  various 
times ; at  least  three  of  these  reports  make  reference  to  this  matter, 
and  I will  read  extracts  of  these  reports  which  are  given  here  in  full.  ; 
There  are  also  many  newspaper  clippings  given  here,  taken  from 
the  papers  commenting  on  the  packing  industry.  , 

Mr.  Durand.  Do  you  think,  Mr.  Veeder,  that  the  commission  is  < 
responsible  for  the  fact  that  England  is  interested  in  its  report  ? 

Mr.  Veeder.  Maybe  the  report  got  to  England  otherwise.  I am  . 
pointing  out  that  this  report  has  done  the  American  meat  packer,  ; 
and  back  of  him,  the  American  producer,  incalculable  damage.  , 
We  knew  of  the  report  before,  and  knew  of  these  letters.  But  it  j 
was  not  for  some  time  after  the  license  was  revoked  that  we  learned  ] 
of  these  matters  asking  that  the  report  be  transmitted  by  the  State  [ 
Department.  We  put  the  two  together.  From  this  we  assumed,  and  ; 
reasonably  so,  I think,  that  there  was  some  connection.  I am  i 
pointing  out,  however,  that  it  did  do  incalculable  damage.  If  the  ; 
report  was  false,  it  certainly  was  a damage  that  never  can  be  cor- 
rected. If  it  was  true,  then,  of  course,  there  is  a moral  question 
involved  that  I will  not  discuss. 

Mr.  Durand.  Has  there  not  been  a considerable  falling  off  of  trade 
in  many  lines  of  industry  ? 

Mr.  Veeder.  I would  like  to  answer  that  question,  but  first  I 
would  like  to  read  the  recommendations  of  a subcommittee  of  the 
central  committee  in  Great  Britain,  and  then  ask  what  effect  that 
would  have  on  the  American  producer  and  on  the  meat  packer. 
This  report  is  the  report  of  a subcommittee  appointed  by  the  central 
committee,  or  standing  committee  on  trusts,  and  adopted  by  the 
standing  committee.  The  names  of  the  committee  are  given  as  it 
is  printed  here. 

Mr.  Kincheloe.  The  only  point  I am  making  as  a member  of  the 
committee,  so  far  as  I am  concerned,  there  have  been  many  state- 
ments about  the  Federal  Trade  Commission  being  ex  parte,  and 
excerpts  were  taken  that  were  most  damaging  to  the  packer.  I 
think  in  fairness  to  the  commission  a member  of  the  commission  who 


MEAT  PACKER. 


501 


conducted  this  examination  ought  to  ’nome  here.  I think  if  this 
resolution  had  gone  from  the  Senate  Committee  on  Agriculture  they 
would  all  have  been  here.  I think  we,  representing  the  people  of 
the  country,  have  as  much  right  to  have  a member  of  the  commission 
here  as  the  Senate  has.  I think  one  who  was  present  and  helped  to 
conduct  this  examination  ought  to  be  here.  For  instance,  take  the 
“ Black  Book”  which  Mr.  Voigt  mentioned.  There  have  been  a lot 
of  insinuations.  I think  a member  of  the  commission  should  be  here. 
There  are  some  questions  I would  like  to  ask  from  the  people  who 
were  there  and  know  about  these  facts  about  that.  I am  not  satis- 
fied, as  a member  of  the  committee,  in  closing  this  hearing  until  we 
have  one  of  these  gentlemen  who  helped  to  conduct  this  examination; 
that  helped  to  make  this  record,  that  we  might  know  about  it. 

The  Chairman.  Let  me  say  what  the  policy  has  been.  So  far  as 
I know,  no  invitation  has  been  sent  out  to  anybody  to  appear  before 
the  committee.  We  have  notified  them  upon  request;  if  they  file  a 
request  here  with  the  clerk  of  the  committee  to  be  notified  if  hearings 
come  up,  we  have  notified  them,  but  we  seldom  invite  or  suggest  to 
anybody  to  come  except,  of  course,  the  secretary.  The  doors  are  open 
to  everybody,  and  I had  no  knowledge  of  who  was  going  to  come  here 
to  testify,  but  various  people  have  been  notified  of  the  hearings.  As 
you  know,  the  resolution  was  passed  last  night,  and  I notified  the 
representative  of  the  Federal  Trade  Commission  of  the  resolution. 

Mr.  Kincheloe.  If  the  Senate  passes  a resolution,  or  asks  for  any 
information,  they  not  only  have  a member  of  the  commission  go 
there,  but  send  all  the  information  asked  for. 

Mr.  Veeder.  I have  two  short  extracts  here  which  I would  like  to 
put  in  in  connection  with  this  discussion.  This  report  I have  re- 
ferred to 

Mr.  Voigt  (interposing).  Before  we  proceed,  I feel  that  the  com- 
mission ought  to  have  a member  here  to  explain  some  of  the  charges 
made  here  by  the  packers  against  the  fairness  of  the  commission,  and 
as  to  the  correctness  of  its  report.  I do  not  believe  we  ought  to  close 
this  hearing  without  giving  the  gentleman  on  the  stand,  or  some 
member  of  the  commission,  a full  opportunity  to  be  heard. 

The  Chairman.  The  policy  of  the  commission  is  not  to  volunteer 
testimony;  is  that  correct? 

Mr.  Durand.  That  is  correct.  It  does  not  volunteer  information 
or  express  opinions  to  the  committee.  It  is  always  desirous  of  being 
helpful  to  the  committee. 

Mr.  Kincheloe.  I don’t  understand  why  a member  of  the  com- 
mission did  not  come  here  in  response  to  the  resolution  passed  by 
this  committee. 

Mr.  Durand.  May  I say,  the  only  member  of  the  commission  who 
was  on  the  commission  at  the  time  the  invesigationi  was  made  was 
Mr.  Murdock?  All  the  others  have  come  on  the  commission  since 
then. 

Mr.  Thompson.  I would  like  to  hear  Mr.  Murdock  on  this,  and  I 
would  like  to  have  an  invitation  extended  to  him  to  come  here  to- 
morrow morning. 

Mr.  Ten  Eyck.  Can’t  we  finish  with  these  two  gentlemen  ? I think 
we  can  finish  with  them  in  10  minutes. 

Mr.  Thompson.  Why  not  adjourn  now?  It  is  getting  late,  and  let 
us  continue  to-morrow  morning  where  we  left  off,  and  issue  an  invi- 
tation to  Mr.  Murdock  to  come  here  ? 


502 


MEAT  PACKER. 


The  Chairman.  I understood  Mr.  Durand  had  finished. 

Mr.  Thompson.  Well,  he  can  go  on,  but  I can  not  stay  any  longer. 
Mr.  Durand.  I can  be  interrupted  at  this  time,  Mr.  Chariman.  It 
seems  to  me,  Mr.  Chairman,  many  statements  have  been  made,  but  I 
think  the  same  things  have  been  covered  in  previous  testimony,  both 
for  and  against. 

I would  say  one  thing,  for  example:  Mr  Nash  testified  that  the 
Federal  Trade  Commission  did  not  come  to  interview  him  or  ask  him 
about  the  competitive  conditions  in  the  packing  industry.  I have 
here  a report  of  our  agent  of  some  15  or  20  pages,  covering  his  inter- 
view with  Mr.  Nash.  We  have  schedules  here  furnished  by  his  com- 

Eany.  I think  he  must  have  forgotten  that  our  agent  did  interview 
im  and  that  a report  was  made. 

Mr.  Veeder.  I am  very  anxious  to  get  this  in  while  we  are  dis- 
cussing exports. 

The  Chairman.  You  may  proceed. 

Mr.  Veeder.  This  interim  report  is  made  by  a subcommittee  to 
the  chairman  of  the  standing  committee  on  trusts.  The  terms  of 
reference  are:  “To  investigate  the  question  of  trusts,  combines,  and 
agreements  affecting  prices  in  connection  with  the  meat  trade  (in- 
cluding hog  products),  so  far  as  they  affect  the  British  consumer.” 

This  report  consists  of  a number  of  sections.  I will  read  one, 
section  5,  a part  of  it: 

The  main  field  of  operation  of  the  companies  is  in  the  United  States.  The  Federal 
Trade  Commission,  in  its  report  on  the  meat-packing  industry,  gave  an  “unqualified 
affirmative”  to  the  question  whether  combinations,  etc.,  “out  of  harmony  with  the 
law  and  the  public  interest  ” existed  in  that  industry.  The  companies  themselves 
admitted  that  in  the  past  they  have  worked  together  in  “pools”  and  other  forms  of 
combination.  They  now  claim  that  they  are  quite  independent  of  each  other,  but, 
as  is  pointed  out  in  paragraph  16  of  the  report  of  the  meat  supplies  committee,  formal 
independence  is  quite  consistent  with  a simple  tacit  understanding  to  respect  each 
other’s  position. 

It  goes  on  at  great  length  here  in  the  Record. 

I want  to  read  the  recommendations  of  the  committee  in  this  same 
report,  on  page  2242  of  the  Congressional  Record: 

We  recommend,  therefore: 

1.  That  it  should  be  the  declared  policy  of  His  Majesty’s  Government  to  prevent 
the  percentage  of  the  beef  trade  which  is  at  present  in  foreign  hands  from  increasing, 
to  the  loss  of  producers  at  home  and  in  the  Dominions  and  of  British  importing  com- 
panies. 

2.  That  in  any  legislation  which  may  be  contemplated  for  the  purpose  of  dealing 
with  trusts  and  combinations  there  should  be  provisions  for  dealing  with  the  form  of 
cooperation  which  we  believe  to  exist  among  the  American  meat  companies  and  for 
the  investigation  of  complaints  against  these  companies,  and  that  the  utmost  publicity 
be  given  to  their  methods  of  business. 

3.  That  steps  be  taken  to  insure  that  foreign  meat  companies  should  be  subject  to 
the  same  basis  of  taxation  in  this  country  as  the  British  meat  companies. 

Now,  let  me  explain.  The  British  meat  companies  are  subject  to 
a tax  on  the  entire  income,  whether  earned  in  the  Argentine,  or 
wherever  earned.  The  American  meat  companies,  being  foreign- 
owned,  are  subject  to  a tax  on  the  business  done  there.  The  recom- 
mendation is  that  they  be  taxed  not  only  on  their  business  income, 
but  on  all  the  business  done,  whether  from  the  Argentine,  or  wherever 
done,  the  same  as  the  British  business  is  taxed.  [Continuing  reading:] 

4r  That  the  Las  Palmas  meat  works  in  Argentina  should  continue  to  be  operated  on 
behalf  of  His  Majesty’s  Government  so  as  to  afford  a means  of  watching  the  develop- 
ments of  cost  and  price  movements. 


MEAT  PACKER. 


503 


In  other  words,  there  is  a British  operating  company  down  there 
that  is  in  particular  competition  with  American  companies  and 
partially  supported  by  American  taxpayers.  [Continuing  reading:] 

5r  That  the  control  of  insulated  shipping  would  afford  one  effective  means  of  prevent- 
ing British  meat  supplies  from 'falling  under  the  domination  of  particular  interests,  and 
that,  accordingly,  the  Government  should  be  equipped  with  such  reserve  powers,  and 
should  maintain  such  relations  with  the  shipowners,  as  would  prevent  the  diversion 
of  meat  supplies  from  the  United  Kingdom  and  the  wholesale  transfer  of  British  in- 
sulated shipping  to  foreign  ownership. 

In  other  words,  that  British  shipowners  boycott  American  manu- 
factured or  American  owned  meats.  [Continuing  reading:] 

6.  That  the  governments  of  the  various  consuming  and  producing  countries  should 
discuss  together  the  possibilities  of  making  joint  investigation  into  the  world’s  meat 
situation  with  the  object  of  taking  such  common  action  as  may  be  required. 

There  is  a great  deal  in  here  on  that,  and  the  documents  are  in 
here  in  full. 

Mr.  Durand.  Mr.  Chairman,  may  I say  as  to  that  particular  mat- 
ter, that  in  the  report  of  the  Federal  Trade  Commission  which  Mr. 
Veeder  feels  is  responsible  for  this  thing  and  the  coming  out  of  the 
English  recommendations,  we  cite  here  on  pages  194  to  197  of  Part 
I of  the  report,  the  findings,  and  recommendations,  of  the  British 
Board  of  Trade  committee  that  was  appointed  July  31,  1908,  “-to 
inquire  how  far  and  in  what  manner  the  general  supply,  distribution, 
and  price  of  meat  in  the  United  Kingdom  are  controlled  or  affected 
by  any  combination  of  firms  or  companies.” 

And  here  is  the  report.  It  seems  to  me  that  that  far  back  the 
British  Government  was  considering  the  question  and  studying  the 
conditions  and  making  recommendations  about  what  to  do  about  it, 
and  that  was  long  before  the  Federal  Trade  Commission  was  ever 
created.  It  does  not  seem  to  me  that  the  Federal  Trade  Commission 
should  be  blamed  for  what  the  English  Government  or  the  Australian 
Government  or  the  Argentine  Government  is  doing  in  these  matters. 
It  seems  to  me  that  the  packers  have  themselves  to  look  to  in  that 
matter. 

Mr.  Clarke.  Don’t  you  think  that  the  very  fact  that  the  Federal 
Trade  Commission  having  this  and  having  commenced  to  call  it 
to  the  attention  of  the  foreign  governments  would  have  a tendency 
to  injure  our  business  here  ? 

Mr.  Durand.  I do  not  understand  that. 

Mr.  Clarke.  You  say  the  agency  of  the  Government  had  in  its 
possession  these  facts  which  it  did  not  necessarily  give  to  these  old 
countries,  because  it  did  injure  business  ? 

Mr.  Durand.  I think  the  accounts  of  the  report  published  by  the 
Federal  Trade  Commission  go  abroad.  We  can  not  give  information 
to  our  own  people  and  prevent  its  going  abroad. 

Mr.  Clarke.  You  were  accelerating  it. 

Mr.  Durand.  I don’t  think  there  is  any  question  about  the  infor- 
mation getting  abroad. 

Mr.  Clarke.  The  Federal  Trade  Commission,  of  course,  did  not 
realize  how  these  reports  were  to  be  used,  or  they  would  not  have 
allowed  it  to  go  out  without  giving  more  consideration  to  that,  to 
the  individuals. 

Mr.  Veeder.  In  all  these  reports — this  report  was  made  after  we 
got  the  Federal  Trade  Commission  report.  In  that  report  they  state 


504 


MEAT  PACKER. 


that  on  their  investigation  in  England  they  find  that  the  American 
companies  are  not  illegally  restraining  trade  in  England;  that  they 
could  not  do  so  if  they  desired  to;  hut  they  say  that  the  American 
commission  had  so  found,  and  they  proceed  to  make  that  report  on 
that  strength.  And  whatever  that  report  says,  this  later  report  gives 
them  a clean  bill  of  health. 

Mr.  Durand.  May  I make  one  statement,  and  that  will  finish 
what  I have  to  say  ? 

The  Chairman.  Yes. 

Mr.  Durand.  I understood  that  Mr.  Veeder  testified  regarding 
some  Swift  correspondence  that  was  seized  by  an  agent  of  the  com- 
mission, and  that  some  physical  force  was  used  in  taking  the  docu- 
ments from  the  office  of  Swift  & Co.,  or  was  threatened.  And  as  to 
that,  all  that  I can  say  is  that  that  matter  was  brought  up  before  in 
the  Senate  hearings  on  “ Government  control  of  the  meat-packing 
industry”;  the  hearings  before  the  Senate  Committee  on  Agriculture 
and  Forestry,  on  S.  5305,  part  2,  and  in  that  volume,  in  pages  1503 
to  1506,  is  a full  explanation  of  that  circumstance,  including  a letter 
written  the  next  day  returning  the  documents  and  making,  I should 
say,  an  apology  for  their  having  been  taken  in  the  first  instance. 

The  Chairman.  In  that  connection,  let  me  say  if  the  commission 
desire  they  may  respond  to  that.  I understand  these  hearings  are 
not  available,  not  even  in  the  Senate. 

Mr.  Durand.  I am  not  sure  of  that. 

The  point  turned  on  the  mutilation  of  a document,  and  for  that 
reason  the  agent  was  asked  to  get  the  original  document  as  evidence 
of  mutilation. 

The  Chairman.  Do  you  desire  that  incorporated  in  your  testimony  ? 

Mr.  Durand.  Yes;  I would  like  it  inserted,  Mr.  Chairman. 

The  Chairman.  It  may  be  so  inserted. 

(The  matter  referred  to  is  as  follows:) 

Mr.  Veeder.  In  February,  1938,  while  the  investigators  were  in  the  office  of 
Swift  & Co.,  the  investigators  took  original  papers,  and  informed  Swift  & Co.'s  em- 
ployees, when  they  protested  against  the  taking  of  the  original  papers,  that  if  they 
did  not  want  them  to  take  them  the>  would  have  to  knock  them  down.  They  were 
going  to  take  the  papers,  anyway,  and  if  they  interfered,  they  would  have  to  knock 
the  investigators  down  to  get  the  papers  back.  The  law  absolutely  provides  that 
the  commission  shall  have  the  right  to  examine  and  to  copy.  There  is  no  authority 
to  take  original  papers,  except  through  process  of  law,  by  the  issuance  of  a subpoena 
duces  tecum. 

Swift  & Co.,  on  February  12,  1918,  wired  the  commission  in  reference  to  the  taking 
of  these  papers  as  follows: 

Chicago,  February  12,  1918. 

Federal  Trade  Commission, 

Washington , I).  C. 

Your  Special  Agent  Child  took  away  from  our  office  Monday  night  nine  files  or 
original  papers  over  our  protest.  We  have  heretofore  afforded  your  examiners  the 
freest  access  to  examine  our  files  and  have  ourselves  made  such  copies  of  the  files  as 
they  desired  to  take  with  them. 

The  taking  of  original  files  will  seriously  interfere  with  the  conduct  of  our  business 
and  is  not  authorized  by  law. 

Under  the  circumstances  we  must  refuse  to  permit  your  agents  or  examiners  to 
remove  the  original  files.  We  will,  in  accordance  with  the  law,  continue  to  give  access 
to  our  files  for  persoaal  examination  and  furnish  copies  as  heretofore. 

We  ask  that  you  instruct  your  agents  and  examiners  to  continue  the  investigation 
in  accordance  with  the  statutes. 

Please  reply. 

Swift  & Co. 


MEAT  PACKER. 


505 


A*  that  point  I would  state  that,  although  not  required  by  law,  Swift  & Co.  had 
been  furnishing;  copies  and  the  stenographic  service  necessary  to  make  copies.  Swift 
& Co.  received  the  following  reply. from  the  secretary  of  the  Federal  Trade  Commission 
on  the  same  day: 

Washington,  D.  C.,  February  12 , 1918. 

Swift  <fc  Co.;  Chicago,  111. 

Subject  matter,  your  wire  February  12,  being  handled  for  commission  by  its  special 
counsel,  Francis  ,1.  Heney,  Morrison  Hotel,  Chicago.  Wire  referred  to  him. 

Bracken, 

Secretary  Federal  Trade  Commission. 

The  same  day,  February  12,  1018,  the  papers  were  returned  by  Mr.  Adams,  together 
with  this  letter: 

Chicago.  111.,  February  12.  1918. 


Mr.  Louis  Swift, 

President  Swift  4c  Co.,  Stockyards,  Chicago,  III. 

De\r  Sir:  Through  a fault  of  mine,  in  transmitting  instructions  to  Mr.  W.  W. 
Childs,  special  agent  of  the  Federal  Trade  Commission,  he  yesterday  afternoon  re- 
moved from  the  offices  of  your  company  several  files  on  the  subject  of  the  Federal 
Trade  Commission.  Immediately,  upon  learning  that  there  had  beeii  a misunder- 
standing and  that  Mr.  Childs  had  removed  those  files  from  your  office,  he  was  in- 
structed to  return  them  to  you  intact  and  to  hand  you  this  letter. 

The  instructions  were  that  Mr.  Adams  secure,  if  possible,  some  letters  and  memoranda, 
which  he  had  found  in  your  files,  relating  to  the  business  of  the  Federal  Trade  Com- 
mission. He  was  particularly  instructed  to  secure,  if  possible,  the  original  mutilated 
letter  which  was  written  by  one  of  the  employees  high  in  the  counsels  of  the  Federal 
Trade  Commission.  This  letter  was  mutilated  by  having  the  signature  cut  from  it. 

I regret  very  much  the  fact  that  1 made  the  mistake  in  transmitting  the  instructions 
to  Mr.  Childs.  I am, 

Very  truly,  yours, 

A.  B.  Adams, 

Examiner  and  Assistant  in  Directing  Food  Investigation. 


Mr.  Heney.  Wa,s  it  an  offense  for  Swift  & Co.  to  mutilate  a letter  by  cutting  off  the 
signature? 

Mr.  Veeder.  No;  I think  not. 

Mr.  Heney.  Under  the  Federal  Trade  Commission  act? 

Mr.  Veeder.  No. 

Mr.  Heney.  Does  it  not  expressly  declare  that  it  is  an  offense  to  mutilate  any  of 
the  correspondence? 

Mr.  Veeder.  I do  not  know  what  the  facts  are  about  that.  My  recollection  is  that 
a full  explanation  was  made  of  that  letter. 

Mr.  Heney.  I am  not  asking  about  the  facts.  I say,  does  not  the  law  provide 

Mr.  Veeder  (interposing).  I say  I do  not  know. 

Mr.  Heney.  You  do  not  know  what  the  law  is? 

Mr.  Veeder.  I do  not  know  what  the  facts  are. 

Mr.  Heney.  I am  asking  you  if  the  law  does  not  provide  that  it  is  an  offense  to 
mutilate  any  correspondence? 

Mr.  Veeder.  There  is  some  provision  of  the  law  prohibiting  the  mutilation  of  files. 

Mr.  Heney.  And  making  it  an  offense? 

Mr.  Veeder.  I do  not  know  whether  Swift  & Co.  mutilated  that  letter.  I say,  I 
do  not  know  what  the  facts  are. 

Mr.  Heney.  And  making  it  an  offense  to  mutilate? 

Mr.  Veeder.  I do  not  recollect.  I have  had  no  occasion  to  look  up  that  feature  of 
the  law. 

Mr.  Healy.  It  has  to  be  done  for  a dishonest  purpose,  of  course. 

Mr.  Heney.  It  does  not  say  anything  about  a dishonest  person. 

Mr.  Veeder.  The  mere  destruction  or  mutilation  of  a letter,  if  not  for  a dishonest 
purpose,  probably  would  be  illegal.  It  is  a point  that  has  never  been  decided. 

Mr.  Heney.  As  it  turned  out,  the  purpose  was  perfectly  plain,  and  it  was  that 
when  the  Federal  Trade  Commissioner ’s  examiners  looked  at  the  letter,  they  could 
not  see  who  wrote  it.  Is  not  that  the  fact? 

Mr.  Veeder.  I do  not  know  what  the  facts  were. 

Senator  Norris.  I would  like  to  inquire  if  the  discovery  was  made  as  to  who  did 
write  it? 

Mr.  Heney.  Yes;  it  turned  out  it  was  written  by  me  to  a gentleman  who  repre- 
sents the  woolgrowers,  but  who  sent  it  to  Mr.  Swift? 

Mr.  Healy.  Maybe  he  mutilated  it. 


506 


MEAT  PACKER. 

Mr.  Yeeder.  You  mean  the  gentleman  whd>  sent  it  to  Mr.  Swift? 

Mr.  Healy.  Yes. 

Mr.  Veeder.  I do  not  know. 

Mr.  Heney.  At  the  time  we  were  trying  to  get  that  particular  mutilated  letter, 
and  I told  Mr.  Child  if  he  got  his  hands  on  that  mutilated  letter,  to  hold  on  to  it, 
because  it  was  evidence  of  a crime. 

Mr.  Veeder.  You  mean  mutilation  was  the  crime? 

Mr.  Heney.  Yes.  It  was  mutilated.  It  was  a criminal  offense,  apparently,  by 
somebody  on  the  inside  of  the  Federal  Trade  Commission,  and  if  there  was  any  man 
on  the  inside  of  the  Federal  Trade  Commission  who  was  writing  confidentially  to 
Swift  & Co.,  I intended  to  find  out  who  did  it,  if  possible. 

Senator  Norris.  This  letter  was  written  by  ytou,  you  say? 

Mr.  Heney.  Yes;  it  turned  out  to  be  written  by  me.  It  was  written  to  Swift  & 
Co.,  though,  and  it  did  not  contain  anything  except  a general  statement  of  the  situa- 
tion, as  to  how  the  investigation  was  proceeding,  but  it  showed  such  an  intimate 
knowledge  of  how  it  was  proceeding  that  it  was  Isure  that  it  did  come  from  somebody 
on  the  inside.  It  was  a certainty  that  it  did  come  from  somebody  on  the  inside. 

Senator  Norris.  Then,  the  man  to  whom  it  was  sent  sent  it  to  Swift  & Co.? 

Mr.  Heney.  Yes.  I insisted  on  their  going  ba,;ck  and  knowing  whose  signature  was 
on  that,  and  when  they  were  told  it  was  mine  they  came  back  with  the  joke  on  me. 

Mr.  Yeeder.  And  there  was  no  prosecution  started? 

Mr.  Heney.  No;  and  there  was  not  any  occasion  for  any.  But  if  I had  been  writing 
that  letter  to  Swift,  Armour,  Morris,  or  Cudahy,  and  doing  it  not  as  the  man  in  charge 
of  the  investigation,  but  as  a man  in  the  Federal  Trade  Commission  who  had  learned 
what  was  going  on,  and  for  the  purpose  of  advising  them  so  that  they  could  make  their 
preparations  accordingly,  a prosecution  ought  to  have  taken  place. 

Mr.  Veeder.  Do  you  think  that  the  man  in  charge  of  the  investigation  is  subjec  t 
to  a different  law  from  the  investigator  making  it? 

Mr.  Heney.  No;  I think  that  if  the  man  in  charge  of  the  investigation  is  seeking 
something  for  the  benefit  of  the  parties  being  investigated,  he  is  guilty  of  reprehen- 
sible conduct,  and  if  there  is  any  way  of  punishing  him,  ought  to  be  punished. 

Mr.  Yeeder.  I do  not  know  what  the  letter  was  or  what  the  facts  were. 

Senator  Norris.  I suppose  the  man  who  sent  it  to  Swift  & Co.  had  an  idea  that  it 
would  be  of  some  benefit  to  Swift  & Co.  to  know  what  was  going  on. 

Mr.  Heney.  They  had  a meeting  of  sheepmen  and  cattlemen  here  in  Washington, 
and  the  wool  growers’  association  was  there;  and  it  turned  out  that  I had  known  this 
man  years  ago,  and  after  he  got  away  from  here  he  wrote  and  asked  me  how  the  inves- 
tigation was  going  along,  and  I wrote  him  in  a general  way,  so  that  there  was  not 
anything  in  it  that  would  have  been  of  any  benefit,  particularly,  to  anybody. 

But  the  statements  showed  a knowledge  of  what  was  going  on  that  could  not  have 
been  had  by  anybody  except  myself  or  somebody  on  the  inside  there,  like  Com- 
missioner Davies  or  Mr.  Robertson  or  any  one  of  those  closely  connected  with  the 
investigation,  And  with  the  signature  cut  out,  when  the  report  was  made  to  me  of 
what  was  in  the  letter,  and  he  did  not  have  a copy  of  it — Mr.  Child  found  it  just  at 
12  o’clock  Saturday,  and  he  wanted  to  take  a copy,  but  they  said  no,  it  was  too  late. 
Tt  was  when  they  did  not  have  the  office  open  Saturday  afternoons.  They  said  that 
he  would  have  to  wait  until  Monday,  and  when  he  came  back  and  told  about  it  and 
gave,  to  the  best  of  his  recollection,  the  substance  of  what  was  in  the  letter,  then  I 
became  very  much  interested  and  was  anxious  to  see  that  letter,  and  I wanted  to 
see  the  original,  if  the  signature  had  been  cut  off  of  it. 

The  Chairman.  I think  you  have  referred  to  these  hearings  a 
number  of  times  ? 

Mr.  Durand.  Yes,  sir. 

The  Chairman.  The  hearings  in  the  Senate  ? 

Mr.  Durand.  Yes,  sir. 

The  Chairman.  Are  there  other  matters  you  would  care  to  have 
inserted  ? 

Mr.  Durand.  There  may  be  one  or  two  that  I might;  not  extended 
passages. 

The  Chairman.  I think  that  should  be  done.  The  chairman  has 
not  even  a copy. 

Mr.  Lightfoot.  One  question  of  Mr.  Durand:  This  whole  matter, 
I think,  grew  out  of  the  statements  that  were  made  last  night  that 


M 


EAT  PACKER. 


507 


the  commission  hadent  v 
the  various  governints. 


oluntarily  these  reports  to  the  heads  of 
You  have  explained  that  you  had  re- 
ceived requests  fronbreigh  countries  for  copies  of  that  report.  Of 
course,  the  Federal  rade  Commission  will  send  copies  of  available 
reports  on  request,  fou  {have  stated  you  had  such  requests,  and 
cited  New  Zealand.  [ will  ask  you  if  you  have  any  recollection  of 
having  received  anysque^ts  for  copies  of  these  summaries  from  the 
particular  ones  in  til  letter  you  have  spoken  of  this  afternoon;  for 
instance,  the  Presidit  of  Switzerland,  and  the  King  of  Italy,  and 
other  monarchs;  dic^ou  receive  any  requests  from  them  for  these 
copies  to  which  yoiresponded  in  sending  them  through  the  State 
Department  ? 

Mr.  Durand.  I asime  not,  from  those  particular  gentlemen,  but 
from  these  countriesl  assume  there  were  several  requests.  I think 
an  examination  of  tl  answer  to  the  Sherman  resolution  will  disclose 
it;  I think  you  will  iid  it  there. 

Mr.  Lightfoot.  Ijthat  list  ? 

Mr.  Durand.  Yoiwill  find  there  that  the  British  Embassy  time 
after  time  would  sen  down  there  for  a dozen  copies. 

Mr.  Ltghtfoot.  I'mow  that  is  true,  and  was  proper  for  you  to 
have  sent  them  copis  on  such  request.  But  as  I remember  the  list 
which  you  transmit^  to  the  Senate  did  not  contain  any  one  of 
these  that  were  incited  in  your  letter. 

Mr.  Durand.  Ma;  I say,  Mr.  Chairman,  that  this  whole  matter 
of  the  Sherman  res.ution,  which  is  really  what  this  discussion  is 
about  this  afternooi  was  covered  by  Senator  Sherman  in  a long 
speech  in  the  Senat,  and  was  replied  to  by  Senator  Kenyon;  he 
made  a very  short  jit  I think  a very  effective  reply,  and  I would 
like  to  cite  the  pasage  in  the  Congressional  Record  where  Senator 
Kenyon’s  remarks  a pear. 

Mr.  Clarke.  Coul  n’t  we  insert  in  our  record  the  requests  without 
going  into  that  ? 

The  Chairman.  I will  be  so  ordered. 

(The  information  referred  to,  comprising  requests  for  copies  of 
the  meat  packing  nport  received  from  representatives  of  foreign 
countries  prior  to  September  27,  1918,  the  date  of  the  commission’s 
letter  requesting  th(  State  Department  to  forward  copies  to  foreign 
Governments,  was  ubsequently  furnished  by  Mr.  Durand  and  is 
here  printed  in  full,  is  follows :) 

Under  date  of  April  26  1918,  Hon.  Alfred  A.  Winslow,  American  consul  general, 
Auckland,  New  Zealand  addressed  a communication  to  the  Secretary  of  State,  in 
part  as  follows,  a copy  o:  which  was  on  May  31,  1918,  transmitted  by  the  State  De- 
partment to  the  Federal  rade  Commission: 

“I  have  the  honor  to  Advise  that  the  Hon.  W.  D.  S.  MacDonald,  minister  of  agri- 
culture, industries,  and  rommerce  of  New  Zealand,  has  asked  me  to  secure  for  him 
and  the  use  of  the  New1  Zealand  Government  all  the  information  possible  relative 
to  the  investigation  macb  by  the  United  States  Federal  Trade  Commission  into  the 
American  Meat  Trust;  aijd  I should  very  greatly  appreciate  it  if  I might  be  furnished 


with  at  least  two  or  thre 
indicated  that  he  would 
“In  this  connection  I 
Trust  are  of  very  great 


copies  of  this  information  for  the  honorable  minister,  who 
ike  at  least  that  many. 

wish  to  explain  that  the  operations  of  the  American  Meat 
nterest  to  New  Zealand  stock  raisers,  since  they  are  very 
greatly  alarmed  over  thdr  actions  in  this  part  of  the  world,  fearing  that  they  pro- 
pose to  get  control  of  the  meat  business  in  this  Dominion.  Armour  & Co.  already 
have  an  office  at  Christchurch,  and  have  employed  one  of  the  most  expert  stockmen 
in  this  Dominion. 


508 


MEAT  PACKER; 


“This  question  is  being  discussed  extensively  in  and  out  of  Government  circles, 
and  I believe  it  will  be  wise  to  make  it  clear  that  the  American  Government  is  in 
nowise  connected  with  or  fostering  the  methods  used  by  what  is  known  as  the 
American  Meat  Trust.  ” (Quoted  in  Report  on  Meat  Packing  Industry,  Fart  I,  p.  35.) 

The  following  letters  which  refer  to  Consul  General  Winslow’s  request  of  April  26, 
1918,  for  copies  of  the  report  on  the  meat-packing  industry  were  transmitted  by  the 
commission  to  the  Senate  on  July  31,  1919;  and  it  it  is  Mr.  Durand’s  recollection  that 
they  show  that,  by  oversight,  the  reports  requested  had  not  been  mailed,  and  were 
again  requested  by  Consul  General  Winslow’s  dispatch  of  October  22,  1918,  to  the 
State  Department.  (Listed  from  Cong.  Record  of  July  31,  1919,  p.  3414,  col.  2.) 

Letter  July  9,  1918,  from  Federal  Trade  Commission  to  American  consul  general, 
Auckland,  New  Zealand. 

Letter  July  9,  1918,  from  Federal  Trade  Commission  to  chief  clerk  State  Department, 
Washington. 

Letter  December  27,  1918,  from  Acting  Secretary  of  State  to  Federal  Trade  Com- 
mission. 

(Inclosures  to  foregoing  letter  being  copy  of  dispatch  No.  523,  October  22,  1918, 
from  Alfred  E.  Winslow,  American  consul  general  at  Auckland,  New  Zealand;  copy 
of  letter  October  18,  1918,  from  W.  D.  S.  MacDonald,  minister  of  agriculture  and  of 
industries  and  of  commerce,  Wellington,  New  Zealand,  to  A.  A.  Winslow,  and  copy 
of  letter  of  July  9,  1918,  from  Federal  Trade  Commission  to  Alfred  A.  Winslow.) 

Letter  of  January  3,  1919,  from  Federal  Trade  Commission  to  Hon.  W.  D.  S.  Mac- 
Donald. 

Letter  January  3,  1919,  from  Federal  Trade  Commission  to  Acting  Secretary  of  State. 

The  following  letters  indicate  the  mailing  of  copies  of  the  meat-packing  report  on 
written  request,  and  the  dulpicate  franks  not  connected  with  letters  indicate  the 
mailing  of  copies  of  the  report  on  telephoned  request  or  request  by  messenger.  (Listed 
from  Cong.  Record  of  July  31,  1919,  p.  3415,  col.  1.) 

Duplicate  frank,  August  29,  1918,  Switzerland  Legation,  2013  Hillyer  Place,  Wash- 
ington, D.  C.  Report  on  meat-packing  industry.) 

Duplicate  frank,  August  29,  1918,  Italian  Embassy,  commercial  delegate,  1400  New 
Hampshire  Avenue,  Washington,  D.  C.  Report  on  meat-packing  industry. 

Duplicate  frank,  August  29,  1918,  Department  of  Labor,  Deputy  Minister,  Ottawa, 
Canada.  Report  on  meat-packing  industry. 

Duplicate  frank,  August  29,  1918,  Imperial  Russian  Embassy,  for  Hon.  C.  Medzik- 
hovsky,  44  Whitehall  Street,  New  York,  N.  Y.  Report  on  meat-packing  industry 
(3  copies). 

Letter  September  4,  1918,  from  Dr.  O.  D.  Skelton,  of  royal  commission  to  inquire 
into  marketing  of  live  stock  and  live-stock  products,  Kingston,  Ontario,  to  Federal 
Trade  Commission.  (Cong.  Record,  July  31,  1919,  p.  3414,  col.  2.) 

Letter,  September  25,  1918,  from  Federal  Trade  Commissi|on  to  O.  D.  Skelton. 

(Duplicate  franks,  September  27,  1918,  indicating  mailing  of  meat-packing  report 
to  following:) 

0.  D.  Skelton,  Queens  University,  Kingston,  Ontario. 

W.  A.  Wilson,  Cooperative  Creameries  (Ltd.),  Regina,  Saskatchewan.  * 

Dr.  J.  A.  Rutherford,  Department  of  Natural  Resources,  Calgary,  Alberta. 

J.  D.  McGregor,  The  Royal  Alexandra,  Winnipeg,  Manitoba. 

Hon.  W.  C.  Sutherland,  Galt,  Ontario. 

Letter  (without  date)  from  Henry  W.  Macrosty,  Board  of  Trade,  London,  to  Federal 
Trade  Commission.  (Cong.  Record,  July  31,  1919,  p.  3414,  col.  2.) 

Letter,  September  16,  1918,  (presumably  in  reply  to  foregoing)  from  Federal  Trade 
Commission  to  Board  of  Trade,  London. 

(Duplicate  frank,  Sept.  18,  1918,  indicating  mailing  of  report  on  meat-packing  and 
report  on  cooperation  in  export  trade,  vols.  1 and  2,  to  Board  of  Trade,  Gwydyr  House, 
Whitehall,  London,  England.) 

(Mr.  Durand  also  submitted  the  following  statement  as  bearing 
on  the  question  under  discussion:) 

The  following  letters,  among  those  sent  by  the  Federal  Trade  Commission  to  the 
Senate  in  response  to  the  Sherman  resolution,  show  that  the  Federal  Trade  Commission 
had  secured,  through  the  courtesy  of  foreign  governments  or  through  the  American 
Consular  Service,  information  used,  or  for  use,  in  its  meat  reports  regarding  the 
activities  of  the  American  packers  abroad,  thus  giving  a reason  for  transmitting  the 
report  when  issued: 

Letter,  April  2,  1917,  from  State  Department  to  Federal  Trade  Commission,  trans- 
mitting report  of  Consul  General  R.  P.  Skinner,  of  London,  on  subject  of  British 
meat  supplies,  and  letter  of  Federal  Trade  Commission,  April  6,  1917,  acknowledging 
receipt. 


MEAT  PACKER. 


509 


Letter,  September  10,  1917,  from  Federal  Trade  Commission  to  ..State  Department, 
requesting  it  to  secure  from  the  British  Government  data  for  use  of  the  commission 
in  its  investigation  of  the  meat  industry,  acknowledgment  by  the  Department  of 
State,  and  transmittal  by  it  (by  letter  of  January  8,  1918)  of  report  of  Consul  General 
Robert  P.  Skinner,  of  London,  furnishing  the  available  information,  With  corre- 
spondence referring  thereto. 

(The  consul  general’s  report  covers,  the  organization  of  the  principal  British  sub- 
sidiaries of  a number  of  American  packers,  and  data  as  to  their  representatives  from 
the  prize  proceedings  with  respect  to  meat  cargoes  seized  by  the  British  Government; 
also  data  regarding  the  governmental  regulation  of  food  under  the  defense  of  the 
realm  act:  also  gives  agencies  or  representatives  of  smaller  American  packers  in  the 
United  Kingdom.) 

Letters  from  Department  of  State,  January  15,  1918,  and  May  6,  1918,  transmitting 
reports  by  Consul  General  Winslow,  of  Auckland,  and  Consul  General  Skinner  of 
London,  on  American  meat  corporations  in  New  Zealand,  with  commission’s  acknowl- 
edgment of  the  same.  (Foregoing  letters  listed  from  Congressional  Record,  July  31 , 
1919,  p.  3418,  column  1.) 

It  may  also  be  noted  in  this  connection  that  on  September  11,  1918,  shortly  before 
copies  of  the  meat-packing  report  were  sent  to  the  Secretary  of  State  for  transmission 
to  the  Government  of  Great  Britain,  the  Federal  Trade  Commission  was  making  an 
unusual  effort  to  secure  special  information  through  the  courtesy  of  the  British  Gov- 
ernment. This  is  shown  by  the  following  letters,  among  those  sent  to  the  Senate 
in  response  to  the  Sherman  resolution  (Cong.  Record,  July  31,  1919,  p.  3417,  col.  2): 

Letter  September  11,  1918,  from  Federal  Trade  Commission  to  Secretary  of  State 
requesting  transmission  of  inclosed  cable  to  British  Ministry  of  Food,  seeking  infor- 
mation on  British  governmental  control  of  the  meat  business.  (See  also  personal 
statement  of  Commissioner  Colver  and  of  Dr.  J.  G.  Ohsol  in  the  reply  of  the  com- 
mission to  the  Sherman  resolution  Cong.  Record  of  July  31,  1919,  pp.  3411  and  3413.) 

Other  information  received  in  previous  years  from  foreign  governmental  agencies 
nr  from  our  consular  agents,  presumably  with  the  aid  of  foreign  governmental  agencies, 
is  indicated  as  follows  (Cong.  Record,  July  31,  1919,  p.  3414,  col.  1): 

Four  letters,  February  1,  March  13,  March  24,  and  May  12,  1915,  between  Joseph 
E.  Davis,  commissioner  of  corporations  and  subsequently  chairman  of  Federal  Trade 
Commission,  and  the  Governor  General  of  Australia,  or  his  secretary,  concerning  a 
request  by  the  commissioner  of  corporations  for  a copy  of  the  report  of  an  investiga- 
tion of  the  beef  industry  by  the  commonwealth  royal  commission  on  the  meat 
export  trade  of  Australia,  and  the  supplying  of  this  document. 

Letters  of  November  8,  1915,  and  letter  of  November  20,  1915,  between  the  chair- 
man of  the  Federal  Trade  Commission  and  the  comptroller  general  of  customs,  London, 
requesting  a copy  of  the  report  by  the  veterinary  inspector  for  the  commonwealth 
to  the  comptroller  general  of  customs  on  the  Beef  Trust. 

Letters  of  July  13,  1917,  July  16,  1917,  September  5,  1917,  and  September  22,  1917, 
between  the  secretary  of  the  Federal  Trade  Commission  and  the  British  Board  of 
Trade  concerning  an  arrangement  for  exchange  of  information.  (The  exchange  con- 
templated was  general  in  character,  not  referring  particularly  to  the  meat  industry.) 

1915.  Notes  from  Commercial  Attache  A.  H.  Baldwin,  London,  on  “Informal 
Combination  in  South  American  Meat  Trade.”  (Published  in  the  Federal  Trade 
Commission’s  report  on  “Cooperation  in  American  Export  Trade,”  pt.  2,  pp.  92-94.) 

1915.  Special  report  of  Vice  Consul  in  Charge  John  S.  Calvert,  Buenos  Aires, 
Argentina,  on  the  meat  industry.  (Published  in  the  Federal  Trade  Commission’s 
report  on  “Cooperation  in  American  Export  Trade,”  pt.  2,  pp.  178,  179.)  (Last 
two  items  cited  from  Cong.  Record,  July  31,  1919,  p.  3418,  end  of  col.  2.) 

That  the  policy  of  the  commission  was  not  to  discourage  exports  of  foodstuffs  is 
indicated  by  a letter  March  27,  1917,  from  the  Federal  Trade  Commission  to  the 
Department  of  State,  returning  to  that  department  a large  number  of  communications 
advocating  an  embargo  on  the  exportation  of  foodstuffs  from  the  United  States,  which 
communications  the  State  Department  had  transmitted  to  the  Federal  Trade  Com- 
mission on  March  16  and  March  19, 1917,  for  its  examination  and  report.  These  letters 
are  among  those  sent  to  the  Senate  in  response  to  the  Sherman  resolution.  (Cong. 
Record,  July  31,  1919,  p.  3418,  col.  1.) 

In  general  conclusion  as  to  the  charges  made  against  the  commission  on  the  floor  of 
the  Senate  when  the  Sherman  resolution  was  introduced,  and  the  charges  implied  in 
the  language  of  that  resolution  itself,  it  may  be  said: 

(1)  That  the  commission’s  reply  to  the  Sherman  resolution  completely  answers  such 
charges,  and  that  the  personal  statements  of  the  commissioners  and  of  the  employees 


510 


MEAT  PACKER. 


show  that  there  was  no  dereliction  on  the  part  of  the  commission,  the  commissioners, 
or  the  employees  of  the  character  charged,  and  in  particular  show — 

(2)  That  Commissioner  Colver  went  abroad,  not  at  public  expense,  but  entirely  at 
his  own  expense; 

(3)  That  he  made  no  speeches  in  England  and  attended  no  social  functions; 

(4)  That  the  alleged  interview  with  him  did  not  at  all  concern  the  subjects  dis- 
cussed in  the  article  in  the  London  Star; 

(5)  That  there  was  no  correspondence  regarding  the  packers  between  Mr.  Colver 
amd  Mr.  McCurdy,  of  the  British  Ministry  of  Foods; 

(6)  That  Mr.  Colver  did  not  see  Mr.  McCurdy  while  in  England,  and  only  spoke 
with  him  briefly  on  the  phone  to  arrange  an  appointment,  which  appointment  did 
not  materialize. 

The  commission  has  been  waiting  nearly  two  years  for  any  hearing  or  report  by  the 
Senate  Interstate  Commerce  Committee  on  the  Sherman  resolution,  but  there  has 
been  done.  The  commission  assumes  that  the  Sedate  committee,  on  reading  the  reply 
of  the  commission  to  the  resolution  and  on  examining  the  documents  transmitted  by 
it,  reached  the  conclusion  that  the  resolution  was  shown  by  the  commission’s  reply 
to  have  been  based  on  misapprehension  and  that  no  action  on  the  committee’s  part 
was  necessary. 

An  examination  of  the  commission’s  reply  of  July  31,  1919,  to  the  Senate  on  the 
Sherman  resolution  will  show  many  facts  which  indicate  why  there  has  been  no 
pressure  from  the  packers  for  a hearing  or  report  on  the  resolution. 

The  emphasis  by  the  packers  on  the  Sherman  resolution  when  it  was  first  intro- 
duced, and  their  bringing  up  at  this  time  of  this  matter  of  the  reports  sent  to  foreign' 
Governments,  are  merely  parts  of  a long  continued  effort  to  distract  attention  from  the 
facts  found  in  the  commission’s  investigation  of  the  packing  industry. 

Senator  Kenyon’s  remarks  on  January  22,  1921,  in  reply  to  Senator  Sherman  were 
in  part  as  follows  (Congressional  Record,  pp.  1886-87): 

* * * I was  unable  to  hear  very  much  of  the  speech  of  the  Senator  from  Illinois 
(Mr.  Sherman),  and  his  address  has  not  as  yet  been  published  in  the  Record;  but  I 
understand  he  made  rather  serious  reflections  upon  the  Federal  Trade  Commission, 
and  especially  upon  Mr.  Colver.  One  of  the  favorite  occupations  nowadays,  of  course, 
is  to  attack  the  Federal  Trade  Commission,  and  especially  Mr.  Colver,  than  whom  I 
do  not  hesitate  to  say  a more  faithful  servant  of  the  people  never  occupied  a public 
office.  He  has  stood  up  under  every  kind  of  assailment,  abuse,  and  malice,  and  he 
can  really  be  proud,  I think,  of  the  enemies  he  has  made.  But  the  charge  which,  as 
I understand,  was  made  by  the  Senator  from  Illinois,  that  the  Federal  Trade  Com- 
mission had  disseminated  throughout  the  world  information  injurious  to  the  meat 
business  of  the  United  States,  is  a charge  that  never  had  been  made  in  the  months  of 
hearings  that  were  had  before  the  Agricultural  Committee  of  the  Senate  and  the 
hearings  in  the  House. 

* * * * * * * 

On  the  27th  day  of  June,  1919,  as  appears  by  volume  58,  part  2,  of  the  Congressional 
Record,  the  following  occurred: 

“Mr.  Sherman.  Mr.  President,  I wish  to  ask  the  Senator  from  Ohio  a question. 
Does  he  know  who  the  chairman  of  the  Federal  Trade  Commission  is  now? 

“Mr.  Pomerene.  I think  Mr.  Colver  is  the  chairman  now. 

“Mr.  Sherman.  Does  the  Senator  know  where  he  is  at  this  time? 

“Mr.  Pomerene.  I do  not;  I am  not  my  brother’s  keeper  in  that  respect. 

“Mr.  Sherman.  I am  not  his  keeper  either;  but  I believe  I have  some  accurate 
information  about  where  he  is.  Unless  he  has  returned  recently,  he  is  in  England. 
When  the  Senator  speaks  of  the  fostering  care  of  the  Federal  Trade  Commission  on 
our  export  trade  I will  say  that  I believe  I will  have  adequate  proof  to  present  here 
that  instead  of  promoting  our  export  trade  he  is  destroying  it  in  England  by  unfriendly 
comments,  by  violent  speeches  reported  in  English  newspapers  denouncing  certain 
of  our  export  lines.  I think  he  is  paying  his  traveling  expenses  across  the  ocean  out 
of  such  appropriations  as  this.” 

On  July  10,  1919,  as  appeared  by  the  Congressional  Record  of  that  date,  volume  58, 
the  Senator  from  Illinois  introduced  a resolution  which  I ask  to  have  set  out  as  a part 
of  my  remarks. 

******* 

The  information  requested  in  this  resolution  was  furnished  to  the  Senate  on  the 
31st  day  of  July,  1919.  It  is  too  long  a document  to  put  in  the  Record,  but  portions 
of  it  are  interesting. 

The  letter  from  Mr.  Fort,  chairman  of  the  commission,  to  Commissioner  Murdock 
I ask  to  have  printed  as  a part  of  my  remarks  at  this  time. 


MEAT  PACKER. 


511 


There  being  no  objection,  the  letter  referred  to  was  ordered  to  be  printed  in  the 
record,  as  follows: 


Spring  Lake,  N.  J.,  July  19,  1919. 

Commissioner  Murdock, 

Federal  Trade  Commission,  Washington,  D.  C. 

My  Dear  Murdock:  I have  your  letter  inclosing  copy  of  the  Sherman  resolution, 
copy  of  the  report  of  the  export  division  of  the  Federal  Trade  Commission,  for  my 
amendment  or  approval,  and  your  request  that  I make  individual  reply  to  the  matters 
covered  by  the  Senate  resolution. 

In  the  allotment  among  the  commissioners  of  the  work  in  the  commission  the  export 
division,  prior  to  my  illness  in  April,  1919,  was  directly  under  my  supervision,  and 
the  report  of  Dr.  Notz  for  the  division  seems  to  be  a complete  summary  of  its  activities 
in  relation  to  export  trade  in  packing-house  products. 

I have  had  no  correspondence  with  any  British  official  on  the  subject  of  import  or 
export  trade  or  on  the  meat  business  of  American  packers.  I have  had  no  communi- 
cation even  remotely  connected  with  that. 

The  only  incident  that  I recall  having  to  do  with  the  American  packers’  export 
trade  was  at  the  time  that  the  Federal  Trade  Commission  called  for  a report  as  to  the 
operations  of  the  foreign  business  of  the  packers.  At  this  time  Mr.  Levy  Mayer, 
representing  Armour  & Co.,  said  to  me  that  the  real  reason  that  the  returns  should 
not  be  made  was  that  it  might  involve  very  heavy  additional  payment  of  income 
tax  to  the  United  States  Government  on  the  part  of  his  client,  and  likewise  might 
lead  to  taxation  in  Argentina  and  other  foreign  countries. 

Mr..  Mayer  exhibited  a list  of  a number  of  companies  doing  business  in  Argentina. 
As  you  remember,  I was  very  much  outraged  at  the  suggestion  that  I could  or  would 
be  party  to  the  defrauding  of  this  Government  or,  being  a Government  official,  would 
be  party  to  a deception  on  a friendly  foreign  Government.  As  you  remember,  I 
reported  the  circumstances  immediately  to  my  colleagues,  and  further  discussion  of 
the  matter  of  the  returns  of  the  foreign  branches  of  the  packing  companies  was  termi- 
nated, and  I am  informed  the  desired  information  was  demanded  and  secured  without 
any  further  delay. 

This,  I think,  covers  all  my  recollections  of  anything  touching  on  foreign  trade  of 
the  packers  or  the  other  things  covered  by  Senator  Sherman’s  resolution. 

With  best  regards  to  you  and  your  brethren,  I am, 

Very  truly,  yours, 


John  Franklin  Fort, 

Chairman. 


Mr.  Colver  has  denied  the  alleged  interview  in  London  and  has  shown  that  his 
expenses  abroad  were  paid  by  himself. 

******* 

I am  embarrassed  by  not  having  a copy  of  the  remarks  of  the  Senator  from  Illinois 
(Mr.  Sherman),  and  I did  not  hear  that  part  of  it,  but,  as  related  to  me,  he  said  that 
England  became  somewhat  annoyed  and  angry  over  the  situation;  that  England 
moved  to  control  her  meat  industry  because  of  what  the  Federal  Trade  Commission 
here  had  said  about  the  packers,  and  that  our  trade  with  England  suffered. 

It  is  true  that  Britain  did  show  some  feeling  about  the  American  packer,  and  1 am 
going  to  put  in  the  record  what  I think  was  the  reason  for  the  feeling,  and  I hope 
Senators  will  read  it.  It  was  not  because  of  any  investigation  of  the  Federal  Trade 
Commission.  They  had  tried  to  run  the  blockade  with  cargoes  of  meat.  Seven 
consignments  were  in  the  prize  courts  of  Britain.  They  used  their  influence  also  to 
stop  a loan  of  the  American  Republic  to  those  who  were  subsequently  our  allies;  at 
least,  it  was  so  published  in  the  newspapers.  My  proof  of  that  is  the  great  paper 
published  in  the  State  ol  the  Senator  from  Illinois,  the  Chicago  Tribune.  On  Septem- 
ber 18,  1915,  we  find  this  heading  on  the  front  page: 

“Packers  ask  Lansing  to  defy  England.  Cite  Jlay’s  dictum  to  Russia  to  smash 
ruling  of  prize  court.  Principle  at  stake.” 

T will  not  ask  to  have  that  all  inserted,  but  on  the  next  page,  as  a part  of  the  same 
article,  is  this: 

\ EEDER  DEMANDS  ACTION. 


Henry  Veeder,  counsel  for  the  Swifts,  directly  charged  England  with  as  “flagrant 
violation  ” of  international  law  as  Germany  committed  in  the  submarine  cases.  Ilis 
statement,  made  after  conference  with  the  Paokingtown  heads,  amounted  to  a demand 
that  the  United  States  defy  England  in  the  meat  cases  and  insist  on  a show-down . 


512 


MEAT  PACKER. 


In  addition  to  declaring  that  the  prize  courts  decision  has  been  thoroughly  incon- 
sistent, Mr.  Veeder  said  England  is  now  breaking  faith  with  the  world  when  she 
repudiates  the  principles  of  international  law,  to  which  she  subscribed  in  the  declara- 
tion of  London.  ••*•*<* 

BEARING  ON  THE  BIG  LOAN. 

The  possibility  of  the  packers  exerting  an  antagonistic  influence  on  the  negotiations 
now  pending  in  New  York  for  the  $1,000,000,000  loan  to  the  Franeo-English  commis- 
sion, because  of  the  Admiralty  court’s  ruling,  was  held  as  improbable  development 
by  the  Packingtown  heads. 

They  refused  to  express  themselves  on  the  subject,  but  the  intimation  was  that  the;y 
would  not  directly  involve  the  meat  seizures  in  the  loan  negotiations. 

Then  there  was  a cable  from  London  that  the  packers  were  to  appeal  from  the  ruling 
of  the  prize  court. 

In  the  issue  of  the  same  great  paper  of  Tuesday,  September  21,  an  article,  on  page 
16,  is  headed:  “Reynolds  talks  of  Allies  loan.  Chicago  banker,  back  from  East,  says 
$500,000,000  is  contemplated,’ ’- 

Mr.  Reynolds  is  the  president  of  the  Continental  and  Commercial  National  Bank, 
in  which  Mr.  Armour  is  one  Of  the  heaviest  stockholders,  and  Mr.  Reynolds  in  this 
interview  said : 

“ But  the  action  of  the  British  prize  court  in  confiscating  $2,500,000  of  the  packing- 
house products  was  an  unfortunate  decision,  I think,  to  be  laid  before  Chicago  bankers 
at  this  time.  Packing  house  interests  are  necessarily  heavily  interested  in  the  larger 
banks,  and,  as  is  shown  by  their  public  utterances,  they  feel  aggrieved  at  the  prize 
court’s  action.” 

This  was  before  the  report  of  the  Federal  Trade  Commission  had  ever  been  filed  or 
gotten  up. 

Then  again,  in  the  issue  of  September  22,  1915,  Is  set  out  a letter,  whih  was  one  of 
three  letters  from  Ambassador  Dumba  to  Baron  Yon  Burian,  Austro-Hungarian 
foreign  minister,  taken  from  J.  F.  J.  Archibald,  the  ambassador’s  messenger.  The 
article  says: 

“This  ietter  has  not  heretofore  been  printed,  is  dated  August  20  and  follows.” 

Here  is  a letter  which  might  well  arouse  feeling  in  England.  It  was  not  by  any 
action  of  the  Federal  Trade  Commission  in  this  country,  but  by  the  effort  to  run  the 
blockade  to  get  meat  to  the  enemies  of  Britain.  Is  it  any  wonder  that  Britain  had 
some  feeling  about  the  packers  in  this  country? 

This  letter  from  Mr.  Dumba  taken  from  this  ambassador’s  messenger,  says  among 
other  things : 

“Says  Wilson  can  control  Congress.” 

That  may  have  been  true  at  that  time.  It  continues. 

“CONFERS  WITH  ARTHUR  MEEKER  ON  A YACHT. 

“As  for  the  note  to  protest  against  British  interference  with  shipping,  which  has 
so  often  been  notified  and  as  often  postponed,  I learn  that  the  issue  is  delayed  in  con- 
sequence of  the  imminent  declaration  of  cotton  as  contraband.  The  feeling  which 
obtains  among  the  great  American  importers  was  accurately  represented  in  Mr. 
Meagher’s  (Meeker’s)  speech.  Meagher  is  one  of  the  principal  exporters  of  the  United 
States,  for  he  is  a partner  in  the  Chicago  firm  of  Armour  & Co.,  who,  with  the  firm  of 
Swift,  control  the  meat  market  of  the  whole  Western  Hemisphere. 

“Mr.  Meagher,  whom  I recently  met  on  a yacht,  and  whose  acquaintance  I had 
already  made  in  Chicago,  absolutely  regards  England’s  acts  as  arbitrary.  No  fewer 
than  31  ships,  with  meat  and  bacon,  shipments  of  his  firm  for  Sweden,  valued  at 
$19,000,000,  have  been  detained  in  English  ports  for  months  under  suspicion  that 
they  ultimately  are  intended  for  Germany. 

“The  negotiations  are  being  so  long  drawn  out,  because  Mr.  Meagher  and  his  com- 
panions will  not  accept  a lame  compromise,  but  insist  on  full  compensation  or  the 
release  of  the  consignments,  in  which  the  bacon  may  be  still  sound. 

“COULD  REFUSE  TO  SEND  MEAT  TO  ENGLAND. 

“My  informant  further  gave  me  to  understand  he  has  not  yet  played  his  last  trump, 
namely,  a refusal  to  import  meat  to  England  under  the  circumstances.  He — that  is 
to  say  the  above  named  slaughtering  houses — control  the  Argentine  market.  At 
the  present  moment  they  are  paralyzed  here  also  by  the  action  of  the  British  Admiralty, 
for  the  latter  has  commandeered  most  of  the  English  freight  ships  intended  to  transport 
meat  from  Argentina.” 


MEAT  PACKER.  513 

Listen  to  this:  If  England  had  any  feeling  toward  the  meat  packer,  would  she  not 
have  a right  to,  in  view  of  this  statement  from  the  Austrian  air.l  assador: 

“If  England  stood  face  to  face  with  the  danger  of  not  being  able  to  get  any  meat 
from  the  United  States  or  from.  Argentina  she  would  soon  give  in.” 

This  was  in  1915.  If  there  is  any  reason,  as  charged  by  the  Senator  from  Illinois, 
for  the  feeling  in  Britain  about  the  meat  industry  in  this  country,  it  is  not  because 
of  anything  the  Federal  Trade  Commission  has  done;  but  on  account  of  the  efforts 
to  run  the  blockade  and  get  meat  into  Germany,  which  was  at  war  with  England, 
through  Sweden,  or  other  countries. 

The  letter  of  the  President  asking  for  the  investigation  was  dated  February  7,  1917, 
and  the  report  of  the  Federal  Trade  Commission  was  filed  July  3,  1918,  or  about  three 
years  after  the  Dumba  letter  was  published.  (Congressional  Record,  Jan.  22,  1921. 
pp.  1886-1887.) 

(At  the  subsequent  request  of  Mr.  Kincheloe,  the  following  state- 
ment was  submitted  by  Mr.  Durand,  comprising  the  previous  testi- 
mony of  Commissioner  Victor  Murdock  and  citing  that  of  Francis  J. 
Heney,  of  the  Federal  Trade  Commission,  before  the  House  Com- 
mittee on  Interstate  Commerce  in  February,  1919,  with  reference  to 
the  public  hearings  conducted  by  the  Federal  Trade  Commission  in 
its  investigation  of  the  meat-packing  industry. 

(The  testimony  of  Commissioner  Murdock  on  this  subject  was  as 
follows  (hearings,  Government  Control  of  Meat  Packing  Industry-, 
House  Committee  on  Interstate  Commerce,  on  H.  R.  13324,  pt.  5, 
pp.  2296  and  2380-2382) :) 

Mr.  Murdock.  * * * In  this  hearing  the  paoker^fimt  of  all  resorted  to  a common- 
place practice.  They  drew  a red  herring  across  the  trail.  One  and  all  testified  that  they 
were  not  treated  fairly.  I am  speaking  largely  for  myself  in  thF.  I for  one  commis- 
sioner did  not  propose  to  stand  between  the  law  and  a man  who  had  broken  the  law. 
I did  not  propose  by  any  manner  of  anrident  to  grant  immunity.  The  funds  that  we 
had  were  considered:  le  but  limited . I did  not  propose  that  the  packers  should  filibuster 
and  obstruct  that  inqumv— and  this,  gentlemen,  was  an  inquiry.  It  was  not  an 
adversary  proceeding.  The  Pre  ident  of  the  United  States  gave  life  to  that  inquiry 
through  a letter  of  direction. 

* x-  * * * * * 

Mr.  Stiness.  I want  to  a;k  Mr.  Murdock  a question.  There  has  been  quite  a dis- 
cussion as  to  whether  or  not  the  pa  :kers  have  had  a fair  show,  and  whether  they  could 
appear  as  witnesses  or  not.  If  I remember  correctly,  Mr.  Heney  said  that  you  pre  ided 
at  a hearing,  I think,  in  Boston? 

Mr.  Murdock.  That  is  right. 

Mr.  Stiness.  You  presided  as  a member  of  the  commission,  did  you  not? 

Mr.  Murdock.  Ye?. 

Mr.  Stiness.  Had  you  prepared  the  evidence  or  gone  over  the  evidence  that  was 
to  be  presented  to  you,  the  number  of  witnesses,  and  the  time  that  you  would  talk  in 
the  investigation;  had  you  considered  those  things? 

Mr.  Murdock.  I do  not  recollect  that.  I fancy  not. 

Mr.  Stiness.  Mr.  Heney  prepared  the  ca^e,  did  he  not? 

Mr.  Murdock.  I suppose  he  did. 

Mr.  Stiness.  And  he  was  the  legal  counsel  for  the  Federal  Trade  Commission? 

Mr.  Murdock.  Yes,  sir. 

Mr.  Stiness.  You  say  you  are  not  a lawyer? 

Mr.  Murdock.  No;  I am  not. 

Mr.  Stiness.  Mr.  Heney  is  a lawyer  and  of  a reputation  of  being  an  able  lawyer. 
You  would  decide  upon  the  question  as  to  who  should  be  admitted  to  testify,  would 
you  not,  before  that  commission? 

Mr.  Murdock.  1 suppose  so;  yes. 

Mr.  Stiness.  And  if  you  had  any  doubt  in  your  mind  about  it,  you  would  take  the 
advice  of  your  counsel,  would  you  not? 

Mr.  Murdock.  Well,  within  limits. 

Mr.  Stiness.  You  said  if  the  question  came  up  you  would  take  the  advice  of  the 
man  acting  as  legal  adviser? 

. Mr.  Murdock.  I think  yes;  but  I would  not  be  bound  by  his  advice. 

“■  Mr.  Stiness.  But  would  you  not  be  bound  by  his  advice  in  affairs  of  the  com- 
mission? 


46985—21 33 


514 


MEAT  PACKER. 


Mr.  Murdock.  If  I did  not  think  his  advice  was  good,  I would  not.  I have  fre~ 
quently  differed  with  the  attorneys,  I will  say. 

Mr.  Stiness.  Did  any  of  the  packers,  or  their  representatives,  appear  before  you 
and  appeal  to  you  as  the  presiding  officer  of  that  meeting  for  permission  to  testify? 

Mr.  Murdock.  I have  no  such  recollection;  no. 

Mr.  Stiness.  Is  your  recollection  sufficient  so  that  if  they  had  you  would  remem- 
ber it? 

Mr.  Murdock.  It  seems  to  me  it  is;  yes.  I have  no  such  recollection. 

Mr.  Stiness.  Did  they,  through  their  counsel  or  themselves,  or  anyone  else,  ask 
permission  to  cross-examine  any  witness? 

Mr.  Murdock.  Of  me? 

Mr.  Stiness.  Yes. 

Mr.  Murdock.  No. 

Mr.  Stiness.  Then  no  testimony  was  offered  and  no  cross-examination  was  asked 
for? 

Mr.  Murdock.  No;  that  is  correct. 

Mr.  Stiness.  They  have  stated — the  packers  have  stated  here  before  this  com- 
mittee— that  such  was  the  case. 

Mr.  Murdock.  That  they  asked  me  in  Boston? 

Mr.  Stiness.  No;  that  they  asked  at  different  times  and  places  to  be  allowed  to- 
testify,  and  Mr.  Heney,  if  I remember,  testified  that  one  time  you  presided  in  Boston. 

Mr.  Murdock.  Yes. 

Mr.  Stiness.  So  I have  asked  you  if  they  did  it  then. 

Mr.  Murdock.  No. 

Mr.  Stiness.  Had  they  asked  to  be  sworn  or  had  they  asked  to  testify,  or  had  they 
asked  to  be  permitted  to  cross-examine  any  witness,  would  you  have  permitted  it? 

Mr.  Murdock.  I think  not.  Of  course  I do  not  know  what  I would  have  done  In  that 
event.  You  are  asking  me  a hypothetical  question  there. 

Mr.  Stiness.  I am  asking  you  as  to  the  policy  of  the  commission. 

Mr.  Murdock.  I should  say  not. 

Mr.  Stiness.  You  wanted  to  get  at  the  truth  of  the  matter,  did  you  not? 

Mr.  Murdock.  Yes. 

Mr.  Stiness.  Then,  why  would  you  have  refused  to  allow  them  to  testify? 

Mr.  Murdock.  As  I stated  in  the  beginning  here  to-day,  I did  not  for  one  want  to 
grant  immunity;  that  is  the  first  thing;  neither  did  I want  that  hearing  delayed  by 
filibustering  and  obstructions,  as  I knew  would  be  in  that  case.  But  I want  to  say 
frankly  if  the  thing  had  been  put  up  to  me  in  Boston  I do  not  know  what  I would  have 
done.  It  was  a new  proposition  to  me.  I had  not  talked  to  anybody  about  it.  But  I 
should  also  like  to  say  this:  I have  no  recollection  of  the  packers  ever  asking  to  be 
heard.  Levy  Mayer,  the  attorney  for  Armour,  is  a man  I have  known  for  25  years. 
Levy  Mayer  came  into  the  commission  during  the  progress  of  the  hearings,  and  as  I 
recollect  it  his  complaint  was  that  we  were  injuring  the  packers’  credit,  and  he  wanted 
hearings  stopped  entirely.  Subsequently  he  appeared  before  Gov.  Fort.  What  hap- 
pened then  I have  only  secondhand  knowledge  of,  and  I am  not  going  to  report  it;  it 
should  come  direct.  The  third  time  Levy  Mayer  and  Mr.  Armour  came  before  Gov. 
Fort  and  Mr.  Colver,  two  members  of  the  commission — I was  not  there — and  Mr. 
Armour  made  a statement,  but  as  near  as  I can  discover  he  did  not  ask  to  be  heard, 
further  than  that,  and  that  was  long  after  the  hearings  had  closed.  But,  as  I said  in 
the  beginning,  this  was  not  an  adversary  proceeding;  this  was  an  inquiry. 

(The  testimony  of  Mr.  Heney  on  this  subject  covers  pages  2022— 
2062  and  2092-2093  in  the  same  volume.) 

The  Chairman.  Without  objection,  the  committee  will  stand 
adjourned  until  to-morrow  morning  at  10  o’clock.  As  it  was 
announced  awhile  ago,  the  hearings  are  now  closed  on  this  matter, 
unless  the  committee  determines  to  reopen  them  in  the  morning. 

(And  thereupon,  at  6 o’clock  and  45  minutes  p.  m.,  the  committee 
adjourned  until  to-morrow*  May  6,  1921,  at  10  o’clock  a.  m.) 

(There  is  printed  as  follows  the  report  of  this  committee  on  its 
packer  bill  last  Congress,  which  was  ordered  incorporated  in  these 
hearings  during  the  first  day:) 


MEAT  PACKER. 


515 


[House  Report  No.  1297,  Sixty-sixth  Congress,  third  session  j 

FEDERAL  LIVE  STOCK  COMMISSION. 

February  5,  1921,  committed  to  the  Committee  of  the  Whole  House  on  the  state  of 
the  Union  and  ordered  to  be  printed. 

Mr.  Haugen,  from  the  Committee  on  Agriculture,  submitted  the  following  report 
(to  accompany.  S.  3944): 

The  Committee  on  Agriculture,  to  whom  was  referred  the  bill  (S.  3944)  to  create  a 
Federal  live-stock  commission,  to  define  its  powers  and  duties,  and  to  stimulate  the 
production,  sale,  and  distribution  of  live  stock  and  live-stock  products,  and  for  other 
purposes,  having  considered  the  same,  report  the  same  with  an  amendment  in  the 
nature  of  a substitute  and  as  so  amended  recommend  that  it  pass. 

The  amendment  proposed  by  the  committee  is  to  strike  out  all  after  the  enacting 
clause  and  insert  the  following: 


“Title  I. — Definitions. 

“This  act  may  be  cited  as  the  ‘Packers  and  stockyards  act,  1921.’ 

“Sec.  2.  When  used  in  this  act — 

“The  term  ‘person’ includes  individuals,  partnerships,  corporations,  and  associa- 
tions; 

“The  term  ‘live  stock’  means  live  or  dead  cattle,  sheep,  swine,  horses,  mules,  or 
goats; 

“The  term  ‘live-stock  products’  means  all  products  and  by-products  of  the  slaugh- 
tering and  meat-packing  industry  derived  in  whole  or  in  part  from,  live  stock;  and 

‘ ‘ The  term  ‘ commerce  ’ means  commerce  among  the  several  States  or  with  foreign 
nations,  or  in  any  Territory  or  possession  of  the  United  States  or  in  the  District  of 
Columbia,  or  between  any  such  Territory  or  possession  and  any  State,  Territory, 
possession,  or  foreign  nation,  or  between  the  District  of  Columbia  and  any  State, 
Territory,  possession,  or  foreign  nation. 

“For  the  purpose  of  this  act  (but  not  in  any  wise  limiting  the  foregoing  definition) 
a transaction  in  respect  to  any  article  shall  be  considered  to  be  in  commerce  if  such 
article  is  part  of  that  current  of  commerce  usual  in  the  live-stock  and  meat-packing 
industries,  whereby  live  stock,  live-stock  products,  dairy  products,  poultry,  poultry 
products,  or  eggs,  are  sent  from  one  State  with  the  expectation  that  they  will  end 
their  transit,  after  purchase,  in  another;  including,  in  addition  to  cases  within  the 
above  general  description,  all  cases  where  purchase  or  sale  is  either  for  shipment  to 
another  State,  or  for  slaughter  of  live  stock  within  the  State  and  the  shipment  outside 
the  State  of  the  products  resulting  from  such  slaughter.  Articles  normally  in  such 
current  of  commerce  shall  not  be  considered  out  of  such  current  through  resort  being 
had  to  any  means  or  device  intended  to  remove  transactions  in  respect  thereto  from 
the  provisions  of  this  act.  For  the  purpose  of  this  paragraph  the  word  ‘State’ 
includes  Territory,  the  District  of  Columbia,  possession  of  the  United  States,  and 
foreign  nation. 

“Title  II — Packers. 

“Sec.  201.  When  used  in  this  act — 

“The  term  ‘packer’  means  any  person  engaged  in  the  business  (a)  of  buying  live 
stock  in  commerce  for  purposes  of  slaughter,  or  (b)  of  manufacturing  or  preparing 
ive-stock  products  for  sale  or  shipment  in  commerce,  or  (c)  of  marketing  live-stock 
products,  dairy  products,  poultry,  poultry  products,  or  eggs,  in  commerce;  but  no 
person  engaged  in  such  marketing  business  shall  be  considered  a packer  unless — 

“(1)  Such  person  owns  or  controls,  directly  or  indirectly,  through  stock  ownership 
or  control  or  otherwise,  any  interest  in  any  business  referred  to  in  clause  (a)  or  (b) 
above,  or  unless 

“(2)  Any  interest  in  such  marketing  business  is  owned  or  controlled,  directly  or 
indirectly,  through  stock  ownership  or  control  or  otherwise,  by  any  person  engaged 
in  any  business  referred  to  in  clause  (a)  or  (b)  above,  or  unless 

“(3)  Any  person  or  persons  jointly  or  severally,  directly  or  indirectly,  through  stock 
ownership  or  control  or  otherwise,  by  themselves  or  through  their  agents,  servants, 
or  employees,  own  or  control  in  the  aggregate  20  per  cent  or  more  of  the  voting  power 
or  control  in  such  marketing  business  and  also  in  any  business  referred  to  in  clause  (a) 
or  (b)  above. 

“Sec.  202.  When  used  in  this  title,  the  term  ‘Secretary’  means  the  Secretary  of 
Agriculture. 


516 


MEAT  PACKER. 


“Sec.  203.  It  shall  be  unlawful  for  any  packer  to — 

“(a)  Engage  in  or  use  any  unfair,  unjustly  discriminatory,  or  deceptive  practice  or 
device  in  commerce;  or 

“(b)  Make  or  give,  in  commerce,  any  undue  or  unreasonable  preference  or  advan- 
tage to  any  particular  person  or  locality  in  any  respect  whatsoever,  or  subject,  in 
commerce,  any  particular  person  or  locality  to  any  undue  or  unreasonable  prejudice 
or  disadvantage  in  any  respect  whatsoever;  or 

“(c)  Sell  or  otherwise  transfer  to  or  for  any  other  packer,  or  buy  or  otherwise  receive 
from  or  for  any  other  packer,  any  article  for  the  purpose  or  with  the  effect  of  appor- 
tioning the  supply  in  commerce  between  any  such  packers;  or 

“(d)  Sell  or  otherwise  transfer  to  or  for  any  other  person,  or  buy  or  otherwise  receive 
from  or  for  any  other  person,  any  article  for  the  purpose  or  with  the  effect  of  manipu- 
lating or  controlling  prices  in  commerce,  or  of  creating  a monopoly  in  the  acquisition  of 
buying,  selling,  or  dealing  in,  any  article  in  commerce,  or  of  restraining  commerce;  or 
“(e)  Engage  in  any  course  of  business  or  do  any  act  for  the  purpose  or  with  the 
effect  of  manipulating  or  controlling  prices  in  commerce,  or  of  creating  a monopoly 
in  the  acquisition  of,  buying,  selling,  or  dealing  in,  any  article  in  commerce,  or  of 
restraining  commerce;  or 

“(f)  Conspire,  combine,  agree,  or  arrange  with  any  other  person  (1)  to  apportion 
territory  for  carrying  on  business  in  commerce,  or  (2)  to  apportion  purchases  or  sales 
of  any  article  in  commerce,  or  (3)  to  manipulate  or  control  prices  in  commerce;  or 
“(g)  Conspire,  combine,  agree,  or  arrange  with  any  other  person  to  do,  or  aid  or  abet 
the  doing  of,  any  act  made  unlawful  by  subdivision  (a),  (b),  (c),  (d),  or  (e). 

“Sec.  204.  (a)  Whenever  the  Secretary  has  reason  to  believe  that  any  packer  has 
violated  or  is  violating  any  provision  of  this  title,  he  shall  cause  a complaint  in  writing 
to  be  served  upon  the  packer,  specifying  the  alleged  violations,  and  requiring  the 
packer  to  attend  and  testify  at  a hearing  at  a time  and  place  designated  therein  at 
least  30  days  after  the  service  of  such  complaint;  and  at  such  time  and  place  there 
shall  be  afforded  the  packer  a reasonable  opportunity  to  be  heard  in  person  or  by 
counsel  and  through  witnesses,  under  such  regulations  as  the  Secretary  may  prescribe. 
Any  person  for  good  cause  shown  may  on  application  be  allowed  by  the  Secretary  to 
intervene  in  such  proceeding,  and  appear  in  person  or  by  counsel. 

“(a)  If,  after  such  hearing,  the  Secretary  finds  that  the  packer  has  violated  or  is 
violating  any  provision  of  this  title,  he  shall  make  a report  in  writing  in  which  he 
shall  state  his  findings  as  to  the  facts,  and  shall  issue  and  cause  to  be  served  on  the 
packer  an  order  requiring  such  packer  to  cease  and  desist  from  continuing  such  viola- 
tion. The  testimony  taken  at  the  hearings  shall  be  reduced  to  writing  and  filed  in 
the  records  of  the  Department  of  Agriculture. 

“(c)  Until  a transcript  of  the  record  in  such  hearing  has  been  filed  in  a circuit  court 
of  appeals  of  the  United  States,  as  provided  in  section  205  the  Secretary  at  any  time, 
upon  such  notice  and  in  such  manner  as  he  deems  proper,  but  only  after  reasonable 
opportunity  to  the  packer  to  be  heard,  may  amend  or  set  aside  the  report  or  order,  in 
whole  or  in  part. 

“(d)  Complaints,  orders,  and  other  processes  of  the  Secretary  under  this  section 
may  be  served  in  the  same  manner  as  provided  in  section  5 of  the  act  entitled  ‘An 
act  to  create  a Federal  Trade  Commission,  to  define  its  powers  and  duties,  and  for 
other  purposes,’  approved  September  26.  1914. 

“Sec.  205.  (a)  An  order  made  under  section  204  shall  be  final  and  conclusive  unless 
within  thirty  days  after  service  the  packer  appeals  to  the  circuit  court  ol  appeals  for 
the  circuit  in  which  he  has  his  principal  place  of  business,  by  filing  with  the  clerk 
of  such  court  a written  petition  praying  that  the  Secretary’s  order  be  set  aside  or  modi- 
fied in  the  manner  stated  in  the  petition,  together  with  a bond  in  such  sum  as  the 
court  may  determine,  conditioned  that  such  packer  will  pay  the  costs  of  the  pro- 
ceedings if  the  court  so  directs. 

“(b)  The  clerk  of  the  court  shall  immediately  cause  a copy  of  the  petition  to  be 
delivered  to  the  Secretary,  and  the  Secretary  shall  forthwith  prepare,  certify,  and  file 
in  the  court  a full  and  accurate  transcript  of  the  record  in  such  proceedings,  including 
the  complaint,  the  evidence,  and  the  report  and  order.  If  before  such  transcript  is 
filed  the  Secretary  amends  or  sets  aside  his  report  or  order,  in  whole  or  in  part,  the 
petitioner  may  amend  the  petition  within  such  time  as  the  court  may  determine  on 
notice  to  the  Secretary. 

“(c)  At  any  time  after  such  transcript  is  filed  the  court,  on  application  of  the  Secre- 
tary, may  issue  a temporary  injunction  restraining,  to  the  extent  it  deems  proper,  the 
packer  and  his  officers,  directors,  agents,  and  employees,  from  violating  any  of  the 
provisions  of  the  order  pending  the  final  determination  of  the  appeal. 

“(d)  The  evidence  so  taken  or  admitted,  duly  certified  and  filed  as  aforesaid  as  a 
part  of  the  record,  shall  be  considered  by  the  court  as  the  evidence  in  the  case.  The 
proceedings  in  such  cases  in  the  circuit  court  of  appeals  shall  be  made  a preferred 
cause  and  shall  be  expedited  in  every  way. 


MEAT  PACKER. 


517 


“(e)  The  Court  may  affirm,  modify,  or  set  aside  the  order  of  the  Secretary,  but  the 
findings  of  the  Secretary  as  to  the  facts,  if  supported  by  evidence,  shall  be  conclusive. 

“(f)  If  the  court  determines  that  the  just  and  proper  disposition  of  the  case  requires 
the  taking  of  additional  evidence,  the  court  shall  order  the  hearing  to  be  reopened  for 
the  taking  of  such  evidence  in  such  manner  and  upon  such  terms  and  conditions  as 
the  court  may  deem  proper.  The  Secretary  may  modify  his  findings  as  to  the  facts, 
or  make  new  findings,  by  reason  of  the  additional  evidence  so  taken,  and  he  shall 
file  such  modified  or  new  findings  and  his  recommendations,  if  any,  for  the  modifica- 
tion or  setting  aside  of  his  order,  with  the  return  of  such  additional  evidence.  Such 
new  or  modified  findings  as  to  the  facts,  if  supported  by  evidence, s hall  be  conclusive. 

“(g)  If  the  circuit  court  of  appeals  affirms  or  modifies  the  order  of  the  Secretary,  its 
decree  shall  operate  as  an  injunction  to  restrain  the  packer,  and  his  officers,  directors, 
agents,  and  employees,  from  violating  the  provisions  of  such  order,  or  such  order 
as  modified. 

“(h)  The  circuit  court  of  appeals  shall  have  exclusive  jurisdiction  to  review,  and  to 
set  aside  or  modify,  such  orders  of  the  Secretary;  and  the  decree  of  such  court  shall 
be  final  except  that  it  shall  be  subiect  to  review  by  the  Supreme  Court  of  the  United 
States  upon  certiorari,  as  provided  in  section  240  of  the  Judicial  Code,  if  such  writ 
is  duly  applied  for  within  sixty  days  after  entry  of  the  decree.  The  issue  of  such 
writ  shall  not  operate  as  a stay  of  the  decree  of  the  circuit  court  of  appeals  in  so  far 
as  such  decree  operates  as  an  injunction. 

4 ‘(i)  For  the  purposes  of  this  title  the  term  ‘circuit  court  of  appeals,’  in  case  the 
principal  place  of  business  of  the  packer  is  in  the  District  of  Columbia,  means  the 
Court,  of  Appeals  of  the  District  of  Columbia. 

“Sec.  206.  (a)  Any  packer,  or  any  officer,  director,  agent,  or  employee  of  a packer, 
who  fails  to  obey  any  order  of  the  Secretary  issued  under  the  provisions  of  section 
204.  or  such  order  as  modified — 

“(1)  After  the  expiration  of  the  time  allowed  for  filing  a petition  in  the  circuit 
court  of  appeals  to  set  aside  or  modifiy  such  order,  if  no  such  petition  has  been  filed 
within  such  time;  or 

“(2)  After  the  expiration  of  the  time  allowed  for  apph/ingfor  a writ  of  certiorari,  if 
such  order,  or  such  order  as  modified,  has  been  sustained  by  the  circuit  court  of 
appeals  and  no  such  writ  has  been  applied  for  within  such  time;  or 

“ (3)  After  such  order,  or  such  order  as  modified,  has  been  sustained  by  the  courts  as 
provided  in  section  205,  shall  on  conviction  be  fined  not  less  than  $1,000  nor  more 
than  $10,000,  or  imprisoned  for  not  less  than  one  year  nor  more  than  five  years,  or 
both.  Each  day  during  which  such  failure  continues  shall  be  deemed  a separate 
offense. 

‘ ‘ (b)  The  Secretary  shall  report  any  violation  of  this  section  to  the  Attorney  General 
of  the  United  States,  who  shall  cause  appropriate  proceedings  to  be  commenced  and 
prosecuted  in  the  proper  courts  of  the  United  States  without  delay. 

“Sec.  207.  Every  packer  shall  keep  such  accounts,  records,  and  memoranda  as  fully 
and  correctly  disclose  all  transactions  involved  in  his  business,  including  the  true 
ownership  of  such  business  by  stockholding  or  otherwise.  Whenever  the  Secretary 
finds  that  the  accounts,  records,  and  memoranda  of  any  packer  do  not  fully  and 
correctly  disclose  all  transactions  involved  in  his  business,  the  Secretary  may  pre- 
scribe the  manner  and  form  in  which  such  accounts,  records,  and  memoranda  shall 
be  kept,  and  thereafter  any  packer  who  keeps  any  other  or  different  accounts,  records, 
and  memoranda  than  those  prescribed  or  approved  by  the  Secretary  shall  upon  con- 
viction be  fined  not  more  than  $5,000,  or  imprisoned  not  more  than  three  years,  or 
both. 

“Sec.  208.  For  the  purpose  of  securing  effective  enforcement  of  the  provisions  of 
this  title,  the  provisions  (including  penalties)  of  sections  6,  8,  9,  and  10  of  the  act 
entitled  ‘An  act  to  create  a Federal  Trade  Commission,  to  define  its  powers  and 
duties,  and  for  other  purposes,’  approved  September  26,  1914,  are  made  applicable 
to  the  jurisdiction,  powers,  and  duties  of  the  Secretary  in  enforcing  the  provisions  of 
this  title  and  to  any  person  subject  to  the  provisions  of  this  title,  whether  or  not  a 
corporation. 

“Title  III. — Stockyards. 

“Sec.  301.  W7hen  used  in  this  act — 

“The  term  ‘stockyard  owner’  means  any  person  engaged  in  the  business  of  con- 
ducting or  operating  a stockyard; 

“The  term  ‘stockyard  services’  means  services  or  facilities  furnished  at  a stockyard 
in  connection  with  the  receiving,  marketing,  feeding,  watering,  holding,  delivery, 
shipment,  weighing,  or  handling,  in  commerce,  of  live  stock; 


518 


MEAT  PACKER. 


“The  term  ‘market  agency^  means  any  person  engaged  in  the  business  of  (1)  buying 
or  selling  in  commerce  live  stock  at  a stockyard  on  a commission  basis,  or  (2)  furnishing 
stockyard  services;  and 

“The  term  ‘dealer*  means  any  person,  not  a market  agency,  engaged  in  the  business 
of  buying  or  selling  in  commerce  live  stock  at  a stockyard,  either  on  his  own  account 
or  as  the  employee  or  agent  of  the  vendor  or  purchaser. 

“Sec.  302.  When  used  in  this  title  the  term  ‘commission*  means  the  Interstate 
Commerce  Commission;  and 

“The  term  ‘stockyard’  means  any  place,  establishment,  or  facility  commonly 
known  as  stockyards,  conducted  or  operated  for  compensation  or  profit  as  a public 
market,  consisting  of  pens  or  other  inclosures  and  their  appurtenances,  in  which 
live  cattle,  sheep,  swine,  horses,  mules,  or  goats  are  received,  held,  or  kept  for  sale 
or  shipment  in  commerce.  This  title  shall  not  apply  to  a stockyard  in  any  calendar 
year  if  in  the  preceding  calendar  year  there  were  not  handled  at  such  stockyard 
150,000  or  more  head  of  cattle  or  500,000  or  more  head  of  hogs. 

“The  commission  shall  from  time  to  time  ascertain,  after  such  inquiry  as  it  deems 
necessary,  the  stockyards  which  come  within  the  foregoing  definition,  and  shall  give 
notice  thereof  to  the  stockyard  owners  concerned,  and  give  public  notice  thereof  by 
posting  copies  of  such  notice  in  the  stockyard,  and  in  such  other  manner  as  it  may 
determine.  The  findings  of  the  commission  as  to  what  stockyards  are  within  the  fore- 
going definition  shall  be  final.  After  the  giving  of  such  notice  to  the  stockyard  owner 
and  to  the  public,  the  stockyard  shall  remain  subject  to  the  provisions  of  this  title 
until  like  notice  is  given  by  the  commission  that  such  stockyard  no  longer  comes 
within  the  foregoing  definition. 

“Sec.  303.  After  the  expiration  of  30  days  after  the  commission  has  given  public 
notice  that  any  stockyard  is  within  the  definition  of  section  302  by  posting  copies  of 
such  notice  in  the  stockyard,  no  person  shall  carry  on  the  business  of  a market  agency 
or  dealer  at  such  stockyard  unless  he  has  registered  with  the  commission,  under  such 
rules  and  regulations  as  it  may  prescribe,  his  name  and  address,  the  character  of 
business  in  which  he  is  engaged  and  the  kinds  of  stockyard  services,  if  any,  which  he 
furnishes  at  such  stockyard.  Whoever  violates  the  provisions  of  this  section  shall  be 
liable  to  a penalty  of  not  more  than  $500  for  each  such  offense  and  not  more  than  $25  for 
each  day  it  continues,  which  shall  accrue  to  the  United  States  and  may  be  recovered 
in  a civil  action  brought  by  the  United  States. 

“Sec.  304.  It  shall  be  the  duty  of  every  stockyard  owner  and  market  agency  to 
furnish  upon  reasonable  request,  without  discrimination,  reasonable  stockyard  serv- 
ices at  such  stockyard. 

“ Sec.  305.  All  rates  or  charges  made  for  any  stockyard  services  furnished  at  a stock- 
yard  by  a stockyard  owner  or  market  agency  shall  be  just,  reasonable,  and  nondis- 
criminatory,  and  any  unjust,  unreasonable,  or  discriminatory  rate  or  charge  is  pro- 
hibited and  declared  to  be  unlawful. 

“Sec.  306.  (a)  Within  60  days  after  the  commission  has  given  public  notice  that  a 
stockyard  is  within  the  definition  of  section  302  by  posting  copies  of  such  notice  in 
the  stockyard  the  stockyard  owner  and  every  market  agency  at  such  stockyard  shall 
file  with  the  commission,  and  print  and  keep  open  to  public  inspection  at  the  stock- 
yard,  schedules  showing  all  rates  and  charges  for  the  stockyard  services  furnished 
by  such  person  at  such  stockyard.  If  a market  agency  commences  business  at  the 
stockyard,  after  the  expiration  of  such  60  days  such  schedules  must  be  filed  before  any 
stockyard  services  are  furnished. 

“(b)  Such  schedules  shall  plainly  state  all  such  rates  and  charges  in  such  detail  as 
the  commission  may  require,  and  shall  also  state  any  rules  or  regulations  which  in 
any  manner  change,  affect,  or  determine  any  part  or  the  aggregate  of  such  rates  or 
charges,  or  the  value  of  the  stockyard  services  furnished.  The  commission  may 
determine  and  prescribe  the  form  and  manner  in  which  such  schedules  shall  be 
prepared,  arranged  and  posted,  and  may  from  time  to  time  make  such  changes  in 
respect  thereto  as  may  be  found  expedient. 

“(c)  No  changes  shall  be  made  in  the  rates  or  charges  so  filed  and  published,  except 
after  10  days’  notice  to  the  commission  and  to  the  public  filed  and  published  as  afore- 
said, which  shall  plainly  state  the  changes  proposed  to  be  made  and  the  time  such 
changes  will  go  into  effect;  but  the  commission  may,  for  good  cause  shown,  allow 
changes  on  less  than  10  days’  notice,  or  modify  the  requirements  of  this  section  in 
respect  to  publishing,  posting,  and  filing  of  schedules,  either  in  particular  instances 
or  by  a general  order  applicable  to  special  or  peculiar  circumstances  or  conditions. 

“(d)  The  commission  may  reject  and  refuse  to  file  any  schedule  tendered  for 
filing  which  does  not  provide  and  give  lawful  notice  of  its  effective  date,  and  any 
schedule  so  rejected  by  the  commission  shall  be  void  and  its  use  shall  be  unlawful. 


MEAT  PACKER. 


519 


“(e)  Whenever  there  is  filed  with  the  commission  any  schedule  stating  a new  rate 
or  charge,  or  a new  regulation  or  practice  affecting  any  rate  or  charge,  the  commission 
may  either  upon  complaint  or  upon  its  own  initiative  without  complaint,  at  once, 
and  if  it  so  orders  without  answer  or  other  formal  pleading  by  the  person  filing  such 
schedule,  but  upon  reasonable  notice,  enter  upon  a hearing  concerning  the  law- 
fulness of  such  rate,  charge,  regulation,  or  practice,  and  pending  such  hearing  and 
decision  thereon,  the  commission,  upon  filing  with  such  schedule  and  delivering  to 
the  person  filing  it  a statement  in  writing  of  its  reasons  for  such  suspension,  may 
suspend  the  operation  of  such  schedule  and  defer  the  use  of  such  rate,  charge,  regu- 
lation. or  practice,  but  not  for  a longer  period  than  30  days  beyond  the  time  when  it 
would  otherwise  go  into  effect;  and  after  full  hearing,  whether  completed  before  or 
after  the  rate,  charge,  regulation,  or  practice  goes  into  effect,  the  commission  may 
make  such  order  with  reference  thereto  as  would  be  proper  in  a proceeding  initiated 
after  it  had  become  effective.  If  any  such  hearing  can  not  be  concluded  within  the 
period  of  suspension,  the  commission  may  extend  the  time  of  suspension  for  a further 
period  not  exceeding  30  days,  and  if  the  proceeding  has  not  been  concluded  and  an 
order  made  at  the  expiration  of  such  30  days,  the  proposed  change  of  rate,  charge, 
regulation,  or  practice  shall  go  into  effect  at  the  end  of  such  period. 

“(f)  After  the  expiration  of  the  60  days  referred  to  in  subdivision  (a)  no  person  shall 
carry  on  the  business  of  a stockyard  owner  or  market  agency  unless  the  rates  and 
charges,  for  the  stockyards  services  furnished  at  the  stockyard  have  been  filed  and 
published  in  accordance  with  this  section  and  the  orders  of  the  commission  made 
thereunder  ; nor  charge,  demand,  or  collect  a greater  or  less  or  different  compensation 
for  such  services  than  the  rates  and  charges  specified  in  the  schedules  filed  and  in 
effect  at  the  time;  nor  refund  or  remit  in  any  manner  any  portion  of  the  rates  or 
charges  so  specified;  nor  extend  to  any  person  at  such  stockyard  any  stockyard 
services  except  such  as  are  specified  in  such  schedules. 

“(g)  Whoever  fails  to  comply  with  the  provisions  of  this  section  or  of  any  regulation 
or  order  of  the  commission  made  thereunder,  shall  be  liable  to  a penalty  of  not  more 
than  $500  for  each  such  offense,  and  not  more  than  $25  for  each  day  it  continues, 
which  shall  accrue  to  the  United  States  and  may  be  recovered  in  a civil  action  brought 
by  the  United  States. 

“(h)  Whoever  willfully  fails  to  comply  with  the  provisions  of  this  section  or  of  any 
regulation  or  order  of  the  commission  made  thereunder,  shall  on  conviction  be  fined 
not  more  than  $1,000,  or  imprisoned  not  more  than  one  year,  or  both. 

“Sec.  307.  It  shall  be  the  duty  of  every  stockyard  owner  and  market  agency  to  es- 
tablish, observe,  and  enforce  just,  reasonable,  and  nondiscriminatory  regulations  and 
practices  in  respect  to  the  furnishing  of  stockyard  services,  and  every  unjust,  unrea- 
sonable, or  discriminatory  regulation  or  practice  is  prohibited  and  declared  to  be 
unlawful. 

“Sec.  308.  (a)  If  any  stockyard  owner,  market  agency,  or  dealer,  violates  any  of  the 
provisions  of  sections  304,  305,  306,  or  307,  or  of  any  order  of  the  commission  made 
under  this  title,  he  shall  be  liable  to  the  person  or  persons  injured  thereby  for  the  full 
amount  of  damages  sustained  in  consequence  of  such  violation. 

“(b)  Such  liability  may  be  enforced  either  (1)  by  complaint  to  the  commission  as 
provided  in  section  309,  or  (2)  by  suit  in  any  district  court  of  the  United  States  of 
competent  jurisdiction;  but  this  section  shall  not  in  any  way  abridge  or  alter  the 
remedies  now  existing  at  common  law  or  by  statute,  but  the  provisions  of  this  act  are 
in  addition  to  such  remedies. 

“Sec.  309.  (a)  Any  person  complaining  of  anything  done  or  omitted  to  be  done  by 
any  stockyard  owner,  market  agency,  or  dealer  (hereinafter  in  this  section  referred  to 
as  the  ‘defendant^  in  violation  of  the  provisions  of  sections  304,  305,  306,  or  307,  or 
of  any  order  of  the  commission  made  under  this  title,  may  at  any  time  within  two  years 
after  the  cause  of  action  accrues,  apply  to  the  commission  by  petition  which  shall 
briefly  state  the  facts,  whereupon  the  complaint  thus  made  shall  be  forwarded  by  the 
commission  to  the  defendant,  who  shall  be  called  upon  to  satisfy  the  complaint,  or 
to  answer  it  in  writing,  within  a reasonable  time  to  be  specified  by  the  commission. 
If  the  defendant  within  the  time  specified  makes  reparation  for  the  injury  alleged  to 
be  done  lie  shall  be  relieved  of  liability  to  the  complainant  only  for  the  particular 
violation  thus  complained  of.  If  the  defendant  does  not  satisfy  the  complaint  within 
the  time  specified,  or  there  appears  to  be  any  reasonable  ground  for  investigating  the 
complaint,  it  shall  be  the  duty  of  the  commission  to  investigate  the  matters  com- 
plained of  in  such  manner  and  by  such  means  as  it  deems  proper. 

“(b)  The  commission,  at  the  request  of  the  live-stock  commissioner,  board  of  agri- 
culture, or  other  agency  of  a State  or  Territory  having  jurisdiction  over  stockyards  in 
such  State  or  Territory,  shall  investigate  any  complaint  forwarded  by  such  agency  in 
like  manner  and  with  the  same  authority  and  powers  as  in  the  case  of  a complaint 
made  under  subdivision  (a) . 


520 


MEAT  PACKER. 


“(c)  The  commission  may  at  aiiy  time  institute  an  inquiry  on  its  own  motion,  in 
any  case  and  as  to  any  niattet  or  thing  concerning  which  a complaint  is  authorized  to 
be  made  to  or  before  the  commission,  by  any  provision  of  this  title,  or  concerning  which 
anv  question  may  arise  under  any  of  the  provisions  of  this  title,  or  relating  to  the 
enforcement  of  any  of  the  provisions  of  this  title.  The  commission  shall  have  the 
same  power  and  authority  to  proceed  with  any  inquiry  instituted  upon  its  own  motion 
as  though  it  had  been  appealed  to  by  petition,  including  the  power  to  make  and 
enforce  any  order  or  orders  in  the  case  or  relating  to  the  matter  or  thing  concerning 
which  the  inquiry  is  had,  except  orders  for  the  payment  of  money. 

“(d)  No  complaint  shall  at  any  time  be  dismissed  because  of  the  absence  of  direct 
damage  to  the  complainant. 

“(e)  If  after  hearing  on  a complaint  the  commission  determines  that  the  complainant 
is  entitled  to  an  award  of  damages,  the  commission  shall  make  an  order  directing  the 
defendant  to  pay  to  the  complainant  the  sum  to  which  he  is  entitled  on  or  before  a 
day  named. 

“(f)  If  the  defendant  does  not  comply  -with  an  order  for  the  payment  of  money  within 
the  time  limit  in  such  order,  the  complainant,  or  any  person  for  whose  benefit  such 
order  w'as  made,  may  within  one  year  of  the  date  of  the  order  file  in  the  district  court 
of  the  United  States  for  the  district  in  which  he  resides  or  in  which  is  located  the 
principal  place  of  business  of  the  defendant  or  in  any  State  court  having  general 
jurisdiction  of  the  parties,  a petition  setting  forth  briefly  the  causes  for  which  he 
claims  damages  and  the  order  of  the  commission  in  the  premises.  Such  suit  in  the 
district  court  shall  proceed  in  all  respects  like  other  civil  suits  for  damages  except 
that  the  finding?  and  orders  of  the  commission  shall  be  prima  facie  evidence  of  the 
facts  therein  stated,  and  the  petitioner  shall  not  be  liable  for  costs  in  the  district  court 
nor  for  costs  at  any  subsequent  stage  of  the  proceedings  unless  they  accrue  upon  his 
appeal.  If  the  petitioner  finally  prevails,  he  shall  be  allowed  a reasonable  attorney’s 
fee  to  be  taxed  and  collected  as  a part  of  the  costs  of  the  suit. 

“Sec.  310.  Whenever  after  full  hearing  upon  a complaint  made  as  provided  in  sec- 
tion 309,  or  after  full  hearing  unde  ’ an  order  for  investigation  and  hearing  made  by 
the  commission  on  its  own  initiative,  either  in  extension  of  any  pending  complaint 
or  without  aiy  complaint  whatever,  the  commission  is  of  the  opinion  that  any  rate; 
charge,  regulation,  or  practice  of  a stockyard  owner  or  market  agency,  for  or  in  con- 
nection with  the  furnishing  of  stockyard  service",  is  or  will  be  unjust,  unreasonable, 
or  discriminatory,  the  commission— 

“(a)  May  determine  and  prescribe  what  will  he  the  just  and  reasonable  rate  or 
charge,  or  rate?  or  charges,  to  be  thereafter  observed  in  such  cam,  or  the  maximum 
or  minimum,  or  maximum  and  minimum,  to  be  charged,  and  what  reg-  lation  or 
practice  is  or  will  be  just,  reasonable,  and  nondiscriminatorv,  to  be  thereafter  fol- 
lowed; and 

“(b)  May  make  an  order  that  such  owner  or  operator  (1)  shall  cease  and  desist  from 
such  violation  to  the  extent  to  which  the  commission  finds  that  it  does  or  will  exist, 
(2)  shall  not  thereafter  publish,  demand,  or  collect  any  rate  or  charge  for  the  fur- 
nishing of  stockyard  services  other  than  the  rate  or  charge  so  prescribed,  or  in  excess 
of  the  maximum  or  less  than  the  minimum  so  prescribed,  as  the  case  may  be,  and  (3) 
shall  conform  to  and  observe  the  regulation  or  practice  so  prescribed. 

‘ ‘ Sec.  311.  Whenever  in  any  investigation  under  the  provisions  of  this  title,  or  in  any 
investigation  instituted  by  petition  of  the  stockyard  owner  or  market  agency  con- 
cerned, which  petition  is  hereby  authorized  to  be  filed,  the  commission  after  full 
hearing  finds  that  any  rate,  charge,  regulation,  or  practice  of  any  stockyard  owner,  or 
market  agency,  for  or  in  connection  vrith  the  receiving,  marketing,  feeding,  holding, 
delivery,  shipment,  weighing,  or  handling,  not  in  commerce,  of  live  stock,  causes  any 
undue  or  unreasonable  advantage,  prejudice,  or  preference  as  between  persons  or 
localities  in  intrastate  commerce  in  live  stock  on  the  one  hand  and  interstate  or  foreign 
commerce  in  live  stock  on  the  other  hand,  or  any  undue,  unjust,  or  unreasonable 
discrimination  against  interstate  or  foreign  commerce  in  live  stock,  which  is  hereby 
forbidden  and  declared  to  be  unlawful,  it  shall  prescribe  the  rate,  charge,  regulation, 
or  practice  thereafter  to  be  observed,  in  such  manner  as,  in  its  judgment,  will  remove 
such  advantage,  prejudice,  preference,  or  discrimination.  Such  rates,  charges,  regu- 
lations, or  practices  shall  be  observed  while  in  effect  by  the  stockyard  owners  or  market 
agencies  parties  to  such  proceeding  affected  thereby,  the  law  of  any  State  or  the 
decision  or  order  of  any  State  authority  to  the  contrary  notwithstanding. 

“Sec.  312.  (a)  It  shall  be  unlawful  for  any  stockyard  owner,  market  agency,  or 
dealer  to  engage  in  or  use  any  unfair,  unjustly  discriminatory,  or  deceptive  practice 
or  device  in  connection  with  the  receiving,  marketing,  feeding,  watering,  holding, 
delivery,  shipment,  weighing,  or  handling,  in  commerce  at  a stockyard,  of  live  stock. 


MEAT  PACKEB. 


521 


“(b)  Whenever  complaint  is  made  to  the  commission  by  any  person,  or  whenever 
the  commission  has  reason  to  believe,  that  any  stockyard  owner,  market  agency,  oi 
dealer  is  violating  the  provisions  of  subdivision  (a),  the  commission  after  notice  and 
full  hearing  may  make  an  order  that  he  shall  cease  and  desist  from  continuing  such 
violation  to  the  extent  that  the  commission  finds  that  it  does  or  will  exist. 

“Sec.  313.  Except  as  otherwise  provided  in  this  act  all  orders  of  the  commission 
other  than  orders  for  the  payment  of  money  shall  take  effect  within  such  reasonable 
time,  not  less  than  five  days,  as  is  prescribed  in  the  order,  and  shall  continue  in  force 
until  its  further  order,  or  for  a specified  period  of  time,  according  as  is  prescribed  in 
the  order,  unless  such  order  is  suspended  or  modified  or  set  aside  by  the  commission , 
or  is  suspended  or  set  aside  by  a court  of  competent  jurisdiction. 

“Sec.  314.  Any  stockyard  owner,  market  agency,  or  dealer,  who  knowingly  fails  to 
obey  any  order  made  under  the  provisions  of  sections  310,  311,  or  312  shall  forfeit  to 
the  United  States  the  sum  of  $500  for  each  offense.  Each  distinct  violation  shall  be 
a separate  offense  and  in  case  of  a continuing  violation  each  day  shall  be  deemed  a 
separate  offense.  Such  forfeiture  shall  be  recoverable  in  a civil  suit  in  the  name  of 
the  United  States. 

“It  shall  be  the  duty  of  the  various  district  attorneys  under  the  direction  of  the 
Attorney  General  to  prosecute  for  the  recovery  of  forfeitures.  The  costs  and  expense 
of  such  prosecutions  shall  be  paid  out  of  the  appropriation  for  the  expenses  of  the  courts 
of  the  United  States. 

“Sec.  315.  If  any  stockyard  owner,  market  agency,  or  dealer  fails  to  obey  any  order 
of  the  commission,  other  than  for  the  payment  of  money,  while  the  same  is  in  effect, 
the  commission,  or  any  party  injured  thereby,  or  the  United  States  by  its  Attorney 
General,  may  apply  to  the  district  court  in  which  such  person  has  his  principal  place 
of  business  for  the  enforcement  of  such  order.  If  after  hearing  the  court  determines 
that  the  order  was  lawfully  made  and  duly  served  and  that  such  person  is  in  disobedi- 
ence of  the  same,  the  court  shall  enforce  obedience  to  such  order  by  a writ  of  injunc- 
tion or  other  proper  process,  mandatory  or  otherwise,  to  restrain  such  person,  his 
officers,  agents,  or  representatives,  from  further  disobedience  of  such  order  or  to 
enjoin  upon  him  or  them  obedience  to  the  same. 

“Sec.  316.  For  the  purpose  of  securing  effective  enforcement  of  the  provisions  of 
this  title,  the  provisions  (including  penalties)  of  sections  12,  14,  16a,  17,  and  19,  and 
of  the  first  ten  paragraphs  of  section  20,  of  the  interstate  commerce  act,  as  amended, 
and  of  all  laws  relating  to  the  compelling  of  testimony  before  the  commission  and  the 
immunity  of  witnesses  in  connection  therewith,  or  to  the  suspending  or  restraining 
the  enforcement,  operation,  or  execution  of,  or  the  setting  aside  in  whole  or  in  part 
the  orders  of  the  commission,  are  made  applicable  to  the  jurisdiction,  powers,  and 
duties  of  the  commission  in  enforcing  the  provisions  of  this  title,  and  to  any  person 
subject  to  the  provisions  of  this  title,  except  that  the  commission  shall  have  no 
authority  to  prescribe  the  form  of  accounts,  records,  and  memoranda  of  a dealer  unless 
it  finds  that  the  accounts,  records,  and  memoranda  kept  by  such  dealer  do  not  fully 
and  correctly  disclose  all  transactions  involved  in  his  business,  including  the  true 
ownership  of  such  business  by  stockholding  or  otherwise. 

“Title  IV. — General  Provisions. 

# “Sec.  401.  When  construing  and  enforcing  the  provisions  of  this  act,  the  act,  omis- 
sion, or  failure  of  any  agent,  officer,  or  other  person  acting  for  or  employed  by  any 
packer,  stockyard  owner,  market  agency,  or  dealer,  within  the  scope  of  his  employ- 
ment or  office,  shall  in  every  case  also  be  deemed  the  act,  omission,  or  failure  of  such 
packer,  stockyard  owner,  market  agency,  or  dealer,  as  well  as  that  of  such  agent, 
officer,  or  other  person. 

“Sec.  402.  If  any  officer,  employee,  agent,  director,  or  member  of  the  governing 
board,  of  any  packer,  stockyard  owner,  market  agency,  or  dealer,  negligently  omits 
personally  to  perform  any  necessary  act  or  properly  to  supervise  or  apportion  duties 
among  his  subordinates,  in  the  execution  of  the  authority  and  functions  vested  in 
him,  and  by  reason  of  such  omission  a violation  of  this  act  directly  results,  he  shall 
be  liable  to  all  the  penal  or  other  provisions  of  this  act  in  respect  to  such  violation. 
The  provisions  of  this  section  shall  be  held  to  extend  and  not  to  limit  the  application 
of  sections  37  and  332  of  the  act  entitled  ‘An  act  to  codify,  revise,  and  amend  the  penal 
laws  of  the  United  States,’  approved  March  4,  1909,  and  nothing  in  this  section  shall 
be  held  to  relieve  any  packer,  stockyard  owner,  market  agency,  or  dealer  from  the 
penal  or  other  provisions  of  this  act. 

“Sec.  403.  Nothing  contained  in  this  act,  except  as  otherwise  provided  herein,  shall 
be  construed — 


522 


MEAT  PACKER. 


u(^l)  To  prevent  or  interfere  with  the  enforcement  of,  or  the  procedure  under,  the 
provisions  of  the  act  entitled  ‘An  act  to  protect  trade  and  commerce  against  unlawful 
restraints  and  monopolies,  ’ approved  July  2,  1890,  the  act  entitled  ‘An  act  to  sup- 
plement existing  laws  against  unlawful  restraints  and  monopolies,  and  for  other 
purposes,’  approved  October  15,  1914,  the  interstate  commerce  act  as  amended,  the 
act  entitled  ‘An  act  to  create  a Federal  Trade  Commission,  to  define  its  powers  and 
duties,  and  for  other  purposes,  ’ approved  September  26,  1914,  the  act  entitled  ‘An 
act  to  promote  export  trade,  and  for  other  purposes,’  approved  April  10,  1918,  or 
sections  73  to  77,  inclusive,  of  the  act  entitled  ‘An  act  to  reduce  taxation,  to  provide 
revenue  for  the  Government,  and  for  other  purposes,’  approved  August  27,  1894, 
as  amended  by  the  act  entitled  ‘An  act  to  amend  sections  73  and  76  of  the  act  of 
August  27,  1894,  entitled  ‘An  act  to  reduce  taxation,  to  provide  revenue  for  the 
Government,  and  for  other  purposes,  ’ approved  February  12,  1913,  or 
“(b)  To  alter,  modify,  or  repeal  such  acts  or  any  part  or  parts  thereof,  or 
“(c)  To  prevent  or  interfere  with  any  investigation,  proceeding,  or  prosecution 
begun  and  pending  at  the  time  this  act  becomes  effective,  or 

“(d)  To  relieve  any  person  from  obedience  to  any  consent  or  other  decree  heretofore 
entered  against  him  by  a court  of  competent  jurisdiction. 

“Sec.  404.  If  any  provision  of  this  act  or  the  application  thereof  to  any  person  or 
circumstances  is  held  invalid,  the  validity  of  the  remainder  of  the  act  and  of  the 
application  of  such  provision  to  other  persons  and  circumstances  shall  not  be  affected 
thereby.” 

Amend  the  title  so  as  to  read: 

“To  regulate  interstate  and  foreign  commerce  in  live  stock,  live  stock  products, 
dairy  products,  poultry,  poultry  products,  and  eggs,  and  for  other  purposes.” 

Comparison’  of  the  Senate  Bill  and  Committee  Amendment. 

ADMINIST  R ATI  ON . 

The  Senate  bill  creates  a new  commission,  to  be  known  as  the  Federal  live-stock 
commission,  composed  of  three  commissioners,  appointed  by  the  President,  with  the 
advice  and  consent  of  the  Senate,  at  a salary  of  $10,000  per  year,  and  provides  that  any 
commissioner  may  be  removed  by  the  President  or  by  concurrent  resolution  of  Con- 
gress. The  committee  is  opposed  to  the  creation  of  any  new  commission  and  believes 
that  existing  agencies  may  be  utilized  instead.  Accordingly  the  committee  amend- 
ment gives  to  the  Secretary  of  Agriculture  control  over  the  packers  on  the  theory  that 
his  duties  are  closely  connected  with  the  investigation  and  control  of  the  meat-packing 
industry.  The  committee  amendment  gives  to  the  Interstate  Commerce  Commission 
control  over  the  stockyards  and  commission  men  and  others  furnishing  services  at 
stockyards.  That  commission  already  has  control  over  transportation  of  cattle,  which 
does  not  end  until  they  are  unloaded'  at  the  yards,  and,  through  its  administration  of 
the  act  relating  to  the  feeding  and  watering  of  cattle  in  transit,  has  familiarity  with  the 
general  subject  matter.  It  seemed  to  your  committee  that  this  governmental  agency 
by  a slight  extension  of  its  authority  could  adequately  take  care  of  the  stockyard 
situation.  The  provisions  of  the  committee  amendment  in  Title  III,  sections  301  to 
316,  are  modeled  on  the  interstate  commerce  act  and  give  to  the  commission,  in  rela- 
tion to  stockyards  and  persons  furnishing  services  thereat  substantially  similar  powers 
as  it  now  has  in  relation  to  common  carriers. 

The  provision  of  the  Senate  bill  (sec.  3)  providing  for  the  removal  of  a member  of 
the  commission  created  by  the  bill  by  concurrent  resolution  of  Congress  seems  objec- 
tionable as  opening  the  bill  to  a possible  veto  by  the  President,  as  in  the  case  of  the 
budget  bill,  which  contained  a similar  provision. 

DEFINITION  OF  PACKERS. 

The  Senate  bill  in  section  2 declares  that  the  term  “packer”  means  “any  person 
engaged  in  the  business  of  slaughtering  live  stock  or  preparing  live-stock  products  for 
sale  in  commerce,  or  of  marketing  live-stock  products  as  a subsidiary  of  or  an  adjunct 
to  any  such  slaughtering  or  preparing  business.”  This  definition  so  drawn  would 
apparently  leave  outside  of  all  regulation  many  branches  of  the  slaughtering  and  meat 
packing  industry.  It  would  seem  that  skillful  reorganization  of  the  existing  forms  of 
corporate  organization  would  result  in  escaping  the  provisions  of  the  act,  as,  for  example, 
the  organization  of  a marketing  corporation  which  owns  the  majority  of  the  stock  of  a 
corporation  engaged  in  the  slaughtering  business.  Such  marketing  corporation  would 
not  seem  to  be  within  the  definition  of  the  act,  inasmuch  as  it  is  not  “a  subsidiary  of 
or  an  adjunct  to”  the  slaughtering  corporation,  but  the  reverse  is  true,  since  the  mar- 
keting company  is  the  parent  corporation. 


MEAT  PACKER. 


523 


Nor  does  the  definition  in  the  Senate  bill  include  cases  where  neither  corporation 
■owns  or  controls  a dollar  of  stock  in  the  other,  but  the  control  of  each  is  in  the  hands 
of  common  stockholdres.  Thus,  if  all  the  stock  of  corporation  A,  engaged  in  the 
slaughtering  business,  and  corporation  B,  engaged  in  the  marketing  business,  were 
owned  by  X,  Y,  and  Z.  individuals,  corporation  B would  clearly  not  be  a “packer” 
since  in  ho  sense  can  it  be  said  to  be  a “subsidiary  of  or  an  adjunct  to  ” corporation  A. 

These  defects  are  remedied  in  the  committee  amendment  (sec.  201). 

The  Senate  bill  does  not  include  in  its  definition  of  “packer’’  persons  engaged  in 
the  business  of  marketing  dairy  products,  poultry,  poultry  products,  or  eggs,  even 
though  100  per  cent  controlled  by  a packer.  The  committee  amendment  (sec.  201) 
includes  such  a person  if  having  an  interest  in  a packing  business,  or  if  a packer  has 
any  interest  in  his  business,  or  if  a common  control  amounting  to  20  per  cent  exists 
in  both  businesses. 

The  Senate  bill  is  also  open  to  the  objection  that  in  section  6 it  provides  for  the 
termination  of  the  jurisdiction  of  the  Federal  Trade  Commission  “in  so  far  as  it  relates 
to  live  stock  and  live-stock  products  in  domestic  commerce.”  Inasmuch  as  there 
are  hundreds  of  concerns  throughout  the  country  selling  live-stock  products  which 
are  in  no  sense  controlled  by  any  of  the  persons  engaged  in  the  packing  industry, 
even  under  the  most  liberal  interpretation  of  the  Senate  definition  of  “packer,” 
but  all  of  which  are  now  subject  to  the  jurisdiction  of  the  Federal  Trade  Commission, 
it  would  appear  that  the  effect  of  the  Senate  bill  would  be  to  remove  these  concerns 
from  the  jurisdiction  of  the  Federal  Trade  Commission  without  intrusting  them  to  the 
jurisdiction  of  any  governmental  agency  created  by  the  bill . The  result  of  this  would 
be  that  they  would  be  entirely  without  regulation  except  in  so  far  as  they  might  be 
subject  to  the  antitrust  laws. 


DIVORCING  OF  PACKERS  FROM  STOCK  YARDS. 

The  Senate  bill  in  section  13  prohibits  the  packers,  after  two  years  from  the  date  of 
passage  of  the  act,  from  owning  or  having  any  interest  in  any  stockyard  unless  the 
commission  under  certain  conditions  extends  the  period.  The  committee  amendment 
contains  no  such  provision,  on  the  ground  that  the  consent  decree  entered  into  by  the 
five  great  packers  and  the  Attorney  General  before  the  Supreme  Court  of  the  District 
of  Columbia  already  provides  for  such  separation  of  packers  and  stockyards  as  is  neces- 
sary at  this  time. 

CONTROL  OF  STOCKYARDS. 

The  Senate  bill  places  the  control  of  stockyards  in  the  live-stock  commission . The 
committee  amendment  places  it  in  the  Interstate  Commerce  Commission.  The  Sen- 
ate bill  gives  the  live-stock  commission  power  to  fix  rates,  charges,  and  practices  in 
and  on  the  stockyard,  but  without  any  hearing.  If  the  rule  of  the  commission  is 
not  obeyed,  the  commission  then  must  hold  a hearing  and  order  the  violator  to  cease 
and  desist.  From  this  order  an  appeal  may  be  taken  to  the  courts,  and  there  is  no 
criminal  penalty  until  after  court  action,  unless  no  appeal  is  taken. 

The  committee  amendment  provides  that  the  Interstate  Commerce  Commission, 
before  making  its  regulations,  must  hold  full  hearings,  but,  the  rule  once  made,  there 
is  a penalty  for  violation,  the  only  remedy  of  the  violator  being  an  injunction  to  re- 
strain the  commission’s  action.  The  procedure  has  been  carefully  worked  out  on 
the  model  of  the  interstate  commerce  act  and  is  believed  to  secure  the  most  adequate 
enforcement  of  fair  and  just  dealings  on  the  stockyards  that  can  be  devised.  The 
committee  amendment  also  gives  a right  of  action  for  damages,  enforceable  by  suit 
at  law  or  complaint  before  the  commission,  to  any  person  injured  by  the  violation  of 
any  provision  of  the  act  by  any  stockyard  owner,  commission  man,  or  other  person 
furnishing  stockyard  services.  No  such  provision  is  in  the  Senate  bill. 

ACTS  OF  PACKERS  WHICH  ARE  MADE  UNLAWFUL. 

The  Senate  bill  in  section  12  enumerates  various  acts  which  it  is  unlawful  for 
packers  to  engage  in.  In  several  instances  (e.  g.,  subdivisions  (b)  and  (d))  the  acts 
made  unlawful  are  not  limited  to  acts  done  in  interstate  or  foreign  commerce,  thus 
raising  serious  questions  of  constitutional  law.  In  other  cases  the  unlawful  acts  are 
limited  to  those  committed  in  relation  to  live-stock  products.  There  seems  no  reason 
why  the  buying  and  selling  between  packers  of  products  other  than  live-stock  prod- 
ucts for  the  purpose  of  apportioning  the  supply  should  not  be  unlawful  as  well  as 
such  buying  and  selling  of  live-stock  products.  The  evils  of  the  packing  industry 
are  not  so  much  isolated  instances  of  unfairness  as  a general  course  of  action  for  the 
purpose  of  destroying  competition,  and  the  bill  should  be  broad  enough  to  secure 
proper  control  of  the  packer  in  all  his  dealings. 


524 


MEAT  PACKER. 


The  Senate  bill,  in  subdivision  (g)  of  section  12,  appears  to  make  it  unlawful  for  a 
packer  to  “fail  to  act  contrary  to  the  provisions”  of  the  act. 

The  committee  amendment  in  section  203  seeks  to  remove  these  defects  in  the 
Senate  bill  and  by  a more  careful  statement  to  prohibit  all  that  should  be  prohibited 
but  to  keep  within  the  limits  of  the  Constitution. 

CRIMINAL  LIABILITY  OF  CORPORATE  OFFICERS. 

The  Senate  bill,  in  section  19,  and  the  committee  amendment  in  section  401,  each 
hold  the  corporation  liable  for  the  acts,  omissions,  or  failures  of  its  officers  in  violation 
of  a duty  placed  by  law  upon  the  corporation,  and  this  substituted  liability  has  been 
held  constitutional  by  the  United  States  Supreme  Court,  New  York  Central  Railroad 
v.  United  States  (1908),  212  U.  S.,  480.  As  a result,  the  stockholder  may  suffer  a 
depreciation  of  his  share  of  the  assets  in  his  pro  rata  amount  of  the  fine  levied,  but 
such  substituted  liability  does  not  extend  to  the  penalty  of  imprisonment.  (See 
Pharmaceutical  Society  v.  London,  etc.,  Supply  Association  (1880),  5 App.  Cas., 
857,  869,  per  Lord  Blackburn.) 

The  committee,  however,  is  of  the  opinion  that  the  only  effective  method  of  com- 
pelling huge  industrial  corporations,  such  as  the  packers  and  stockyard  operators, 
to  comply  with  the  law,  is  to  compel  the  officers  in  charge  of  the  activities  of  the 
corporation  to  assume  personal  responsibility  for  seeing  to  it  that  the  corporate  affairs 
are  conducted  in  accordance  "with  law,  rather  than  to  rely  solely  on  holding  the  cor- 
poration responsible  by  fine.  The  mere  finding  of  the  corporation  is  not  so  severe 
but  that  often  the  corporation  can  easily  afford,  from  the  profits  obtained  from  the 
violation,  to  pay  any  fine  that  may  possibly  result  upon  being  proved  guilty  of  the 
violation.  And  the  stockholders,  despite  their  indirect  loss,  either  feel  that  a good 
bargain  has  been  driven  in  their  behalf  or  will  find  themselves  too  powerless  to  bring 
pressure  to  bear  upon  the  officers.  Again,  in  many  cases,  the  principal  officers  con- 
trol a majority  of  the  stock,  and  the  realization  that  a pecuniary  loss  only  will  be 
'suffered,  is  a small  preventative  unless  the  fine  authorized  is  so  large  as  to  make  the 
court  hesitant  in  imposing  it. 

The  existing  law,  however,  is  extremely  confused  as  to  the  liability  of  officers  for  the 
failure  of  the  corporation  to  be  conducted  in  accordance  with  law.  If  the  officer 
actually  participates  by  positive  act  of  his  own  in  the  violation,  or  so  admits  by  de- 
murrer, he  will  be  held  liable  as  an  accessory  (People  v.  Clark  (1891),  8 N.  Y.  Crim., 

3 79;  United  States  v.  McAndrews  & Forbes  Co.  (D.  C.,  1906),  149  Fed.,  823,  832;  sec. 
332,  U.  S.  Penal  Code),  or  as  a conspirator  (People  v.  Duke  fN.  Y.,  1897),  37  Crim. 
App.,  372;  People  v.  Winslow  (D.  C.,  1912),  195  Fed.,  578;  affirmed,  227  U.  S.,  302; 
sec.  37,  IT.  S.  Penal  Code).  In  many  cases,  however,  the  officer  acts  alone  and  has  no 
accomplice.  If  the  statutory  duty  is  then  construed  as  resting  only  upon  the  corpora- 
tion, as  is  customary  in  the  case  of  a corporate  act,  the  officer  will  not  be  liable,  except 
in  rare  cases  through  the  strained  doctrine  of  a constructive  accessory  to  or  conspirator 
with  the  entity  itself.  (Kaufman  v.  United  States  (C.  C.  A.,  1912),  217  Fed.,  613; 
Cohen  v.  United  States  (C.  C.  A.,  1907),  157  Fed.,  651;  Wood  v.  United  States  (D.  C., 
1913),  204  Fed.,  55.) 

When,  however,  as  in  the  majority  of  cases,  the  officer’s  misconduct  arises  from  no 
positive  act  on  his  part  but  merely  the  failure  or  omission  to  take  the  action  necessary 
for  compliance  or  to  see  to  it  that  his  subordinates  take  such  action  or  that  to  some  one 
is  apportioned  the  duty  of  seeing  to  the  compliance  with  the  particular  statutory 
requirement,  the  officer  will  in  most  cases  be  found  not  liable  in  criminal  proceedings. 
And  to  this  class  of  cases  may  be  added  those  in  which  the  actual  consent  to  or  partici- 
pation in  or  authorization  of  the  violation  is  found  practically  impossible  of  proof. 
The  only  possible  existing  remedy  is  the  continued  regulation  of  business  by  court 
injunction  and  the  institution  of  contempt  proceedings  against  individual  officers 
for  any  violation  of  the  injunction.  But,  as  stated  elsewhere  in  this  report,  the  com- 
mittee is  of  the  opinion  that  the  Federal  courts  and  the  district  attorneys  have  not 
the  facilities,  experience,  or  personnel  adequate  for  such  regulation  with  justice  either 
to  the  packer  or  operator  or  to  the  public.  Rather  such  regulation  should  be  vested 
in  an  administrative  body. 

It  will  be  found  that  the  liability  of  corporate  officers  in  the  type  of  case  adverted 
to  in  the  preceding  paragraph  has  frequently  been  expressly  limited  to  cases  in  which 
participation  in  the  violation  is  actually  proved  (Rex  v.  Hendrie  (1905),  11  Ont.  L. 
Rep.,  202;  Rex  v.  Hays  (1907),  14  Ont.  L.  Rep.,  201),  or  in  which  consent  is  given  to 
or  direct  knowledge  had  of  the  violation  (People  v.  England  (N.  Y.,  1882),  27  Hun., 
139;  Crall  v.  Commonwealth  (1905),  13  Va.,  855;  State  v.  Ross  (1909),  55  Oreg.,  450; 
State  v.  Carmean  (1905),  126  Iowa,  291).  It  is  true  that  a few  cases  hold  liable  the 
principal  officers  for  deliberate  or  negligent  failure  properly  to  supervise  or  apportion 


MEAT  PACKER. 


525 


the  duties  to  their  subordinates  or  presume  that  they  have  given  authority  to  their 
subordinates  actually  to  carry  on  the  forbidden  practices  in  the  conduct  of  the  busi- 
ness along  its  customary  lines.  (United  States  v.  Mayfield  (D.  C.,  1910),  177  Fed., 
765;  Rex  v.  Medley  (1834),  6 Car.  & Pavne,  292;  People  v.  White  Lead  Works  (1890), 
82  Mich., .471,  479;  Cowley  v.  People  (1881),  83  N.  Y.,  464,  469;  State  v.  Burnam  (1912), 
71  Wash.,  199;  Overland  Uotton  Mills  Co.  v.  People  (1904),  32  Colo.,  263.)  But  the 
doctrine  of  law  achieving  this  result  is  far  from  firmly  established  and  the  above 
cases  are  the  exception  to  the  general  rule. 

In  order  to  enforce  personal  responsibility  and  prevent  its  being  shifted  either 
to  the  corporate  entity  or  the  stockholders  or  to  some  subordinate  who  is  made  the 
scapegoat,  the  committee  amendment  provides  in  section  402  that  any  officer,  em- 
ployee, agent,  director,  or  member  of  the  governing  board  of  any  packer,  stockyard 
owner,  market  agency,  or  dealer,  who  negligently  omits  personally  to  perform  any 
necessary  act,  or  properly  to  supervise  or  apportion  the  duties  among  his  subordinates 
in  the  execution  of  the  authority  and  functions  vested  in  him  by  reason  of  such  omis- 
sion a violation  of  this  act  directly  results,  he  shall  be  liable  for  such  violation.  The 
Senate  bill  contains  no  corresponding  provision  and  in  the  opinion  of  the  committee 
its  omission  constitutes  a grave  weakness.  The  Senate  bill  in  section  23  makes 
criminally  liable  an  officer  of  the  packer  who  fails  to  obey  an  order  of  the  commission. 
The  order,  however,  is  addressed  to  the  packer  generally  and  does  not  place  any  duty 
upon  the  officer  positively  to  see  to  it  that  some  of  his  subordinates  are  vested  with  the 
duty  of  executing  the  order  and  are  supervised  so  as  properly  to  execute  it.  The 
duty  would  rest  solely  on  the  packer  as  a corporation,  and  even  if  the  term  “packer’  ’ 
were  construed  to  include  “ officer,  ” just  as  the  term  “person’  ’ is  so  defined  by  section 
2 of  the  Senate  bill,  nevertheless  the  officer’s  responsibility  would  cease  if  he  person- 
ally did  not  participate  in,  authorize,  or  consent  to  any  positive  act  in  violation  of  the 
order. 

DEFINITION  OF  “LIVE  STOCK.” 

The  Senate  bill  includes  within  the  definition  of  “live  stock”  only  cattle,  sheep, 
and  swine.  The  committee  amendment  covers,  in  addition,  horses,  mules,  and  goats. 
In  this  connection  attention  is  called  to  the  fact  that  by  the  Agricultural  appropria- 
tion act  approved  July  24,  1919,  horse  meat  was  made  subject  to  the  meat-inspection 
act  and  that  there  are  already  two  plants  under  Federal  inspection. 

POWERS  OF  BUREAU  OF  MARKETS. 

The  Senate  bill  in  section  6 provides  that  the  commission  created  by  the  bill  shal^ 
have  all  the  powers  and  duties  heretofore  exercised  or  performed  by  the  Bureau  of 
Markets  in  the  Department  of  Agriculture  relating  to  the  acquisition  and  dissemina- 
tion of  information  regarding  the  production,  distribution,  and  consumption  of  live 
stock  and  live-stock  products.  It  is  far  from  clear  under  the  terms  of  the  bill  whether 
these  powers  and  duties  are  transferred  or  whether  they  are  duplicated.  In  any  event 
such  a provision  is  unnecessary  in  the  committee  amendment,  which  gives  control  of 
the  packing  industry  to  the  Secretary  of  Agriculture. 

ACCOUNTS  OF  PACKERS. 

The  Senate  bill  in  section  16  provides  that  the  packers  must  keep  statements  of 
account  and  make  such  reports  or  returns  as  the  commission  may  require  authorizes 
the  commission  to  prescribe  uniform  system  of  accounts,  and  requires  the  installa- 
tion and  use  thereof  by  the  packers.  Apparently  under  the  bill  the  only  method 
of  enforcing  this  requirement  is  by  the  same  process  of  appeals  through  the  courts 
as  is  provided  for  violation  of  any  other  order  of  the  commission.  The  committee 
amendment  authorizes  the  Secretary  of  Agriculture,  whenever  he  finds  that  the 
accounts  of  a packer  do  not  fully  and  correctly  disclose  all  transactions  involved  in 
his  business,  to  prescribe  the  manner  and  form  in  which  the  accounts  shall  be  kept, 
and  provides  a criminal  penalty  for  any  packer  who  keeps  any  other  or  different; 
accounts  than  those  prescribed  by  the  Secretary. 

VOLUNTARY  REGISTRATION. 

The  Senate  bill  in  section  25  contains  a system  of  voluntary  registration  of  persons 
conducting  stockyards,  slaughtering  establishments  for  live  stock,  or  processing, 
preserving,  or  storing  live  stock  or  perishable  foodstuffs.  As  a condition  of  registration 
all  registrants  bind  themselves  to  comply  with  all  the  rules  and  regulations  which 
the  commission  may  make  and  in  return  are  to  be  given  various  advantages.  No 


526 


MEAT  PACKER. 


testimony  was  given  before  the  committee  showing  any  good  reason  why  such  a system 
should  be  put  into  operation,  but  on  the  other  hand  it  was  contended  that  the  purpose 
of  the  section  was  to  make  it  practically  necessary  for  every  packer  to  come  under 
the  section  and  thereby  to  lose  control  of  the  method  of  conducting  his  business.  The 
committee  felt  that  in  the  absence  of  some  strong  reason  for  the  adoption  of  such  a 
system  it  would  be  dangerous  at  this  time  to  enter  upon  such  an  experiment,  which 
seems  little  short  of  a licensing  system,  which  the  experience  of  the  past  has  not  proved 
of  benefit — on  the  contrary,  a most  expensive  system. 

The  rules  and  regulations  of  the  meat  division  of  the  United  States  Food  Adminis- 
tration, as  amended  November  1, 1918,  relating  to  the  profits  of  slaughtering  and  meat- 
packing concerns,  provide  (see  Exhibit  J,  p.  537,  hearings  before  the  Committee  on 
Agriculture,  House  of  Representatives,  on  cold-storage  legislation): 

‘ ‘Article  I. 

“ Section  1.  Every  person  or  corporation  shall  be  subject  to  these  rules  and  regula- 
tions who  is  required  to  procure  a license  for  the  conduct  of  his  business  by  the 
proclamation  of  the  President  of  the  United  States  dated  October  8,  1917,  and  who 
shall  be  engaged  in  the  slaughtering  of  live  stock  and  the  manufacture  of  products 
therefrom  and  wdiose  aggregate  sales  during  the  12  months  ending  November  1,  1917, 
exceeded  $100,000,000.  These  rules  shall  take  effect  as  of  November  1,  1917. 

“Article  II. 

‘ ‘ Sec.  4.  Every  licensee  shall  so  conduct  his  business  that  the  annual  profit  of  busi- 
ness, defined  in  section  2 of  this  article,  shall  not  exceed  9 per  cent  of  the  investment 
therein,  as  hereinafter  defined. 


“Article  II. 

“Sec.  8.  (3)  The  aggregate  amount  treated  by  licensee  as  the  investment  in  busines 
defined  in  section  2 of  this  article  shall  in  no  case  exceed  the  amount  of  the  capital 
stock,  bonds,  bills  payable,  interest-bearing  accounts  payable,  and  surplus  and 
undivided  profits  of  licensee’s  total  business  * * * less  his  investment  in  business 
not  subject  to  these  regulations.” 

Generally,  in  referring  to  “annual  profits  of  business,”  it  has  reference  to  net  profits 
on  capital  stock  invested  or  on  capital  stock,  surplus,  and  undivided  profits,  in  which 
case  the  interest  actually  paid  on  bonds  and  money  borrowed  is  allowed,  and  as  such 
is  generally  considered  satisfactory  profits,  but  under  the  license  system  and  under 
the  rules  and  regulations  it  will  be  observed  that  9 per  cent  was  allowed  on  bonds, 
bills  payable,  interest-bearing  accounts  payable,  etc.  As  a result  a packer  might 
go  into  the  market  and  borrow  money  on  his  note  or  interest-bearing  account  at  a 
low  rate  of  interest  and  be  allowed  9 per  cent,  or  a profit  of  $6,000,  on  every  $100,000 
of  borrowed  money. 

Under  the  license,  according  to  Moody's  Analysis  of  Industrial  Investments,  1920, 
it  was  made  possible  for  the  Cudahy  Packing  Co.,  in  the  year  ending  October  31, 1918, 
to  make  a profit  on  preferred  stock  of  39J  per  cent,  and  on  common  stock  of  24^  to 
25J  per  cent;  Morris  & Co.  to  make  a profit  of  140.6  per  cent  on  its  stock  in  1918;  Armour 
& Co.  to  make  in  the  year  ending  November  3,  1918,  41  per  cent  on  preferred  stock 
and  15,2  per  cent  on  common  stock;  Swift  & Co.  to  make  a profit  of  18.51  per  cent  on 
its  stock  in  1918;  and  for  the  year  ending  December  28,  1918,  Wilson  Co.  a profit  on 
preferred  stock  of  72.84  per  cent  and  34.49  per  cent  on  common  shares. 

RULES  AND  REGULATIONS. 

The  Senate  bill  in  sections  10  and  15  give  the  commission  power  to  make  all  rules 
and  regulations  necessary  for  the  enforcement  of  the  act  and  makes  it  the  duty  of  all 
persons  subject  to  the  act  to  obey  these  rules  and  regulations.  No  penalty  is  provided 
for  a violation  of  the  rules  and  regulations,  and  the  only  method  of  enforcing  them 
is  for  the  commission  after  notice  and  hearing  to  make  an  order  to  the  packer  to  cease 
and  desist  from  further  disobedience  of  the  rule.  Inasmuch  as  the  rule,  if  it  is  to 
have  any  force,  must  be  founded  upon  the  act,  and  inasmuch  as  the  bill  provides  a 
method  for  the  commission  after  hearing  to  make  an  order  against  the  packer  to  cease 
and  desist  from  violating  the  act,  it  is  not  apparent  what  useful  purpose  is  attained  by 
giving  power  to  make  rules  and  regulations.  The  committee  amendment  proceeds 
upon  the  theory  that  no  liability  rests  upon  the  packer  until  after  the  Secretary  of 
Agriculture  upon  full  hearing  has  made  an  order  to  cease  and  desist  from  a violation 


MEAT  PACKER. 


527 


of  act.  After  such  order  has  been  sustained  by  the  courts,  or  alter  the  lapse  of  30 
days  if  no  appeal  is  taken  from  the  order,  a violation  of  the  order  is  punishable  by 
criminal  penalty. 

PROCEDURE  FOR  DETERMINING  VIOLATIONS  BY  PACKER. 

The  Senate  bill  in  Title  IV  provides  that  if  the  live-stock  commission  believes  that 
a packer  is  violating  any  provision  of  the  act  or  of  any  rule  or  regulation  made  under 
the  act,  it  shall,  after  hearing,  make  an  order  to  cease  and  desist  from  the  violation. 
After  service  of  the  order  the  packer  may  appeal  to  the  circuit  court  of  appeals,  which 
may  modify  or  set  aside  the  order,  but  only  if  the  packer  can  show  that  “the  order  is 
unsupported  by  the  weight  of  the  evidence,”  or  was  issued  without  due  notice  and 
hearing,  or  infringes  the  Constitution,  or  is  beyond  the  jurisdiction  of  the  commission. 

The  failure  of  the  Senate  bill  to  observe  the  distinction  between  an  order  based  on 
a violation  of  the  act  and  an  order  based  on  a violation  of  a rule  or  regulation  would, 
it  is  feared,  cause  great  confusion  and  differences  of  great  importance  in  the  decision 
of  the  appeal.  It  would  appear  that  in  the  first  case  it  would  he  the  duty  of  the  court 
to  weigh  all  the  evidence  taken  at  the  hearing  in  order  to  determine  the  existence  of 
facts  which  support  the  finding  of  a violation  of  the  law,  whereas  in  the  second  case  it 
is  clearly  arguable,  if  not  certain,  that  the  only  function  of  the  court  would  be  to 
determine  whether  the  weight  of  the  evidence  shows  that  a regulation  of  the  commis- 
sion has  been  violated.  Suppose,  for  example,  that  the  commission  makes  a regula- 
tion that  a certain  practice  is  unfair,  and  prohibits  its  continuance.  An  alleged  viola- 
tion of  the  regulation  occurs,  and  the  commission,  after  hearing,  finds  that  the  viola- 
tion is  proved  and  makes  an  order  to  cease  and  desist.  Upon  appeal  the  6nly  question 
for  the  court  would  seem  to  be:  Does  the  weight  of  the  evidence  show  that  the  packer 
has  violated  the  regulation?  and  the  court  would  have  no  right  to  enter  upon  a con- 
sideration of  the  question:  Does  the  weight  of  the  evidence  show  the  existence  of  facts 
which  make  the  regulation  itself  fair  and  reasonable?  which  question  it  would  be 
clearly  authorized  to  examine  had  the  commission’s  order  been  based  on  a violation 
of  the  law  itself. 

As  pointed  out  above  in  this  report,  under  the  heading  “Rules  and  regulations,” 
no  good  reason  is  apparent  why  the  commission  should  be  given  power  to  make  rules, 
if  their  disobedience  can  be  punished  only  in  the  same  manner  as  a disobedience  of 
the  law,  and  if  they  are  to  be  punished  after  a more  drastic  procedure  than  in  the 
case  of  a violation  oi  the  law  itself,  the  injustice  of  such  a grant  of  power  is  clear. 

The  committee  amendment,  which  does  not  authorize  the  Secretary  of  Agriculture 
to  forbid,  by  administrative  fiat,  acts  which  are  not  invalid  by  the  terms  of  the  law, 
provides  that  when,  after  full  hearing,  the  Secretary  finds  that  the  law  has  been 
violated,  he  may  issue  an  order,  from  which  an  appeal  may  be  taken  to  the  circuit 
court  of  appeals.  The  court  may  modify  or  set  aside  the  order,  but  the  Secretary’s 
findings  of  fact,  if  supported  by  evidence,  are  conclusive.  An  examination  of  the 
decisions  of  the  Supreme  Court  shows  that  this  procedure  is  not,  as  are  the  correspond- 
ing provisions  of  the  Senate  bill,  open  to  the  possible  doubt  as  to  its  constitutionality, 
but  does  on  the  other  hand  afford  the  packer  the  protection  from  arbitrary  administra- 
tive action  demanded  by  the  courts.  At  the  same  time  the  court  is  left  free  to  give 
effect  to  the  determinations  of  the  Secretary,  unless  they  are  arbitrary  or  unreason- 
able. The  importance  of  the  distinctions  above  discussed  to  the  efficient  enforcement 
of  the  legislation  to  be  enacted  merits,  in  the  committee’s  opinion,  the  setting  forth 
in  this  report  of  such  decisions. 

I.  Interstate  Commerce  Commission  v.  Louisville  & Nashville  Railroad  Co.  (1913), 
227  U.  S.,  88,  90-92. 

“On  the  appeal  here,  the  Government  insisted  that  while  the  act  of  1887  to  regulate 
commerce  (24  Stat.,  379,  c.  104,  secs.  14,  15,  16)  made  the  orders  of  the  commission 
only  prima  facie  correct,  a different  result  followed  from  the  provision  in  the  Hepburn 
Act  of  1906  (34  S tat.,  584,  c.  3591,  sec.  15)  that  rates  should  be  set  aside  if  after  a hearing 
the  ‘commission  shall  be  of  the  opinion  that  the  charge  was  unreasonable.’  In 
such  case  it  is  insisted  that  the  order  based  on  such  opinion  is  conclusive,  and  (though 
Int.  Com.  Comm.  v.  Union  Pacific  R.  R.,  22  U.  S.,  541,  547,  was  to  the  contrary) 
could  not  be  set  aside,  even  if  the  finding  was  wholly  without  substantial  evidence 
in  support  of  it. 

“1.  But  the  statute  gave  the  right  to  a full  hearing,  and  that  conferred  the  privilege 
of  introducing  testimony  and  at  the  same  time  imposed  the  duty  of  deciding  in  accord- 
ance with  the  facts  proved.  A finding  without  evidence  is  arbitrary  and  baseless. 
And  if  the  Government’s  contention  is  correct  it  would  mean  that  the  commission 
had  a power  possessed  by  no  other  officer,  administrative  body,  or  tribunal  under 
our  Government.  It  would  mean  that  where  the  rights  depended  upon  facts  the 


528 


MEAT  PACKER. 


commission  could  disregard  all  rules  of  evidence  and  capriciously  make  findings  by 
administrative  fiat.  Such  authority,  however,  beneficently  exercised  in  one  case, 
could  be  injuriously  exerted  in  another,  is  inconsistent  with  rational  justice,  and 
comes  under  the  Constitution’s  condemnation  of  all  arbitrary  exercise  of  power. 

“In  the  comparatively  few  cases  in  which  such  questions  have  arisen  it  has  been 
distinctly  recognized  that  administrative  orders,  quasi- judicial  in  character,  are  void 
if  a hearing  was  denied;  if  that  granted  was  inadequate  or  manifestly  unfair;  if  the 
finding  was  contrary  to  the  ‘indisputable  character  of  the  evidence’  (Tang  Tun  v. 
Edsell,  223  U.  S.,  673,  681;  Chin  Yoh  v.  United  States,  208  U.  S.,  8,  13;  Low  Wah 
Suey  v.  Backus,  225  U.  S.,  460,  468;  Zakonaite  v.  Wolf,  226  U.  S.,  272);  or  if  the  facts 
found  do  not  as  a matter  of  law  support  the  order  made  (United  States  v.  B.  & 0.  S.  W 
R.  R.,  226  U.  S.,  14;  Cf.  Atlantic  C.  L.  v.  North  Carolina  Corp.  Com.,  206  U.  S., 
1,  20;  Wisconsin,  M.  & P.  R.  Co.  v.  Jacobson,  179  U.  S.,  287,  301;  Oregon  Railroad  v. 
Fairchild,  224  U.  S.,  510;  I.  C.  C.  v.  Illinois  Central,  215  U.  S.,  452,  470;  Southern 
Pacific  Co.  v.  Interstate  Com.  Comm.,  219  U.  S.,  433;  Muser  v.  Magone,  155  U.  S., 
240,  247). 

“2.  The  Government’s  claim  is  not  only  opposed  to  the  ruling  in  I.  C.  C.  v.  Union 
Pacific  (222  U.  S.,  541,  547)  and  the  cases  there  cited,  but  is  contrary  to  the  terms  of 
the  act  to  regulate  commerce,  which  in  its  present  form,  provides  (25  Stat.,  861,  sec. 
17)  for  methods  of  procedure  before  the  commission  that  “conduce  to  justice.”  The 
statute,  instead  of  making  its  orders  conclusive  against  a direct  attack,  expressly 
declares  that  ‘they  may  be  suspended  or  set  aside  by  a court  of  competent  jurisdic- 
tion.’ (36  Stat.,  539,  15.)  Of  course  that  can  only  be  done  in  cases  presenting  a 
justiciable  question.  But  whether  the  order  deprives  the  carrier  of  a constitutional 
or  statutory  right,  whether  the  hearing  was  adequate  and  fair,  or  whether  for  any 
reason  the  order  is  contrary  to  law,  are  all  matters  within  the  scope  of  judicial  power. 

“ 3 . Under  the  statute  the  carrier  retains  the  primary  right  to  make  rates,  but  if  after 
hearing  they  are  shown  to  be  unreasonable  the  commission  may  set  them  aside  and 
require  the  substitution  of  just  for  unjust  charges.  The  commission’s  right  to  act 
depends  upon  the  existence  of  this  fact,  and  if  there  was  no  evidence  to  show  that 
the  rates  were  unreasonable  there  was  no  jurisdiction  to  make  the  order.  (Int.  Com. 
Comm.  v.  Northern  Pacific  Ry.,  216  U.  S.,  538,  544.)  In  a case  like  the  present  the 
courts  will  not  review  the  commission’s  conclusions  of  fact  (Int.  Com.  Comm.  v. 
Delaware,  etc.,  Ry.,  220  U.  S.,  235,  251)  by  passing  upon  the  credibility  of  witnesses 
or  conflicts  in  the  testimony.  But  the  legal  effect  of  evidence  is  a question  of  law. 
A finding  without  evidence  is  beyond  the  power  of  the  commission.  An  order  based 
thereon  is  contrary  to  law  and  must,  in  the  language  of  the  statute,  ‘be  set  aside  by 
a court  of  competent  jurisdiction.  * 

Interstate  Commerce  Commission  v.  Union  Pacific  R.  R.  Co.  (1912),  222  U.  S., 
541,  547,  548: 

“There  has  been  no  attempt  to  make  an  exhaustive  statement  of  the  principle 
involved,  but  in  cases  thus  far  decided  it  has  been  settled  that  the  orders  of  the  com- 
mission are  final  unless  (1)  beyond  the  power  which  it  could  constitutionally  exercise; 
or  (2)  beyond  its  statutory  power;  or  (3)  based  upon  a mistake  of  law.  But  questions 
of  fact  may  be  involved  in  the  determination  of  questions  of  law,  so  that  an  order, 
regular  on  its  face,  may  be  set  aside  if  it  appears  that  (4)  the  rate  is  so  low  as  to  be  con- 
fiscatory and  in  violation  of  the  constitutional  prohibition  against  taking  property 
without  due  process  of  law;  or  (5)  if  the  commission  acted  so  arbitrarily  and  unjustly 
as  to  fix  rates  contrary  to  evidence,  or  without  evidence  to  support  it;  or  (6)  if  the 
authority  therein  involved  has  been  exercised  in  such  an  unreasonable  manner  as  to 
cause  it  to  be  within  the  elementary  rule  that  the  substance,  and  not  the  shadow, 
determines  the  validity  of  the  exercise  of  the  power.  (Int.  Com.  Com.  v.  111.  Cent., 
215  U.  S.,  452,  470;  Southern  Pacific  v.  Int.  Com.  Com.,  219  U.  S.,  433;  Int.  Com. 
Com.  v.  Northern  Pacific,  216  U.  S.,  538,  544;  Int.  Com.  Com.  v.  Alabama  Midland 
Ry.  Co.,  168  U.  S.,  144,  174.) 

‘ ‘ In  determining  these  mixed  questions  of  law  and  fact,  the  court  confines  itself  to 
the  ultimate  question  as  to  whether  the  commission  acted  within  its  power.  It  will 
not  consider  the  wisdom  or  expediency  of  the  order,  or  whether,  on  like  testimony, 
it  would  have  made  a similar  ruling.  ‘The  findings  of  the  commission  are  made  by 
law  prima  facie  true,  and  this  court  has  ascribed  to  them  the  strength  due  to  the  judg- 
ments of  a tribunal  appointed  by  law  and  informed  by  experience.’  (111.  Cent.  v. 
I.  C.  C.,  206  U.  S.,  441.)  Its  conclusion,  of  course,  is  subject  to  review  but,  when 
supported  by  evidence,  is  accepted  as  final;  not  that  its  decision,  involving  as  it  does 
so  many  and  such  vast  public  interest,  can  be  supported  by  a mere  scintilla  of  proof, 
but  the  courts  will  not  examine  the  facts  further  than  to  determine  whether  there  was 
substantial  evidence  to  sustain  the  order.” 


MEAT  PACKER. 


529 


Oregon  Railroad  and  Navigation  Co.  v.  Fairchild  (1912),  224  U.  S.,  510,  528: 

“If,  then,  the  defendant  had  notice  and  was  given  the  right  to  show  that  the  order 
asked  for,  if  granted,  would  be  unreasonable,  it  has  not  in  this  case  been  deprived  of 
the  right  to  a hearing.  That  being  so,  it  leaves  for  consideration  the  contention  tha 
as  a matter  of  law  the  order,  on  the  facts  proved,  was  so  unreasonable  as  to  amount 
to  a taking  of  property  without  due  process  of  law.  This  necessitates  an  examination 
of  the  evidence  not  for  the  purpose  of  passing  on  conflicts  in  the  testimony  or  of  decid- 
ing upon  pure  questions  of  fact  but,  as  said  in  Kansas  City  Railway  Co.  v.  Albers 
Commission  Co.  (223  U.  S.,  573,  591),  from  an  inspection  of  the  ‘entire  record,  in- 
cluding the  evidence,  if  properly  incorporated  therein,  to  determine  whether  what 
purports  to  be  a finding  upon  questions  of  fact  is  so  involved  with  and  dependent  upon 
such  questions  of  law  as  to  be  in  substance  and  effect  a decision  of  the  latter.’  (Cedar 
Rapids  Gas  Light  Co.  v.  Cedar  Rapids,  223  U.  S.,  655;  Graham  v.  Gill,  223  U.  S.,  643.) 
Here  the  question  presented  is  whether  as  a matter  of  law  the  facts  proved  show  the 
existence  of  such  a public  necessity  as  authorized  a taking  of  property.” 

Interstate  Commerce  Commission  v.  Northern  Pacific  Railway  Co.  (1910),  216 
U.  S.,  538,  543,  544: 

“The  authority  of  the  commission  to  establish  through  routes  and  joint  rates  is 
conditioned  by  the  proviso  that  ‘no  reasonable  or  satisfactory  through  route  exists.7 
(Act  of  June  29,  1906,  c.  3591,  sec.  4,  34  Stat.,  584,  589.)  It  is  urged  that  this  condition 
is  addressed  only  to  the  opinion  of  the  commission  and  can  not  be  reexamined  by  the 
courts  as  a jurisdictional  fact.  The  difficulty  of  distinguishing  between  a rule  of  law 
for  the  guidance  of  a court  and  a limit  set  to  its  power  is  sometimes  considerable. 
Words  that  might  seem  to  concern  jurisdiction  may  be  read  as  simply  imposing  a 
rule  of  decision,  and  often  will  be  read  in  that  way  when  dealing  with  a court  of  general 
powers.  (Fauntleroy  v.  Lum,  210  U.  S.,  230,  235.)  But  even  in  such  a case  there 
may  be  a difference  of  opinion  (ibid,  245),  and  when  \ye  are  dealing  with  an  adminis- 
trative order  that  seriously  affects  property  rights,  and  does  so  by  way  rather  of  fiat 
than  of  adjudication,  there  seems  to  be  no  reason  for  not  taking  the  proviso  of  the 
statute  in  its  natural  sense.  (See  Interstate  Commerce  Commission  v.  Illinois  Central 
R.  R.  Co.,  215,  U.  S.,  452,  470.) 

“We  are  of  opinion  then  that  the  commission  had  no  power  to  make  the  order  if  a 
reasonable  and  satisfactory  through  route  already  existed,  and  that  the  existence  of 
such  a route  may  be  inquired  into  by  the  courts.  How  far  the  courts  could  go  into 
that  inquiry  we  need  not  now  decide.  No  doubt  in  complex  and  delicate  cases 
great  weight  at  least  would  be  attached  to  the  judgment  of  the  commission.  But  in 
the  present  instance  there  is  no  room  for  difference  as  to  the  facts,  and  the  majority 
of  the  commission  plainly  could  not  and  would  not  have  made  the  declaration  in  their 
order  that  there  was  no  such  through  route,  but  for  a view  of  the  law  upon  which  this 
court  must  pass.” 

Interstate  Commerce  Commission  v.  Illinois  Central  R.  R.  Co.  (1910),  215  U.  S., 
452,  470: 

“Beyond  controversy,  in  determining  whether  an  order  of  the  commission  shall  be 
suspended  or  set  aside,  we  must  consider,  (a)  all  relevant  questions  of  constitutional 
power  or  rights;  (6)  all  pertinent  questions  as  to  whether  the  administrative  order  is 
within  the  scope  of  the  delegated  authority  under  which  it  purports  to  have  been  made; 
and  (c)  a proposition  which  we  state  independently,  although  in  its  essence  it  may  be 
contained  in  the  previous  one,  viz,  whether,  even  although  the  order  be  in  form  within 
the  delegated  power,  nevertheless  it  must  be  treated  as  not  embraced  therein,  because 
the  exertion  of  authority  which  is  questioned  has  been  manifested  in  such  an  unrea- 
sonable manner  as  to  cause  it,  in  truth,  to  be  within  the  elementary  rule  that  the 
substance  and  not  the  shadow  determines  the  validity  of  the  exercise  of  the  power. 
(Postal  Telegraph  Cable  Co.  v.  Adams,  155  U.  S.,  688,  698.)  Plain  as  it  is  that  the 
powers  just  stated  are  of  the  essence  of  judicial  authority,  and  which,  therefore,  may 
not  be  curtailed,  and  whose  discharge  may  not  be  by  us  in  a proper  case  avoided,  it 
is  equally  plain  that  such  perennial  powers  lend  no  support  whatever  to  the  proposi- 
tion that  we  may,  under  the  guise  of  exerting  judicial  power,  usurp  merely  adminis- 
trative functions  by  setting  aside  a lawful  administrative  order  upon  our  conception 
as  to  whether  the  administrative  power  has  been  wisely  exercised. 

“ Power  to  make  the  order  and  not  the  mere  expediency  or  wisdom  of  having  made 
it,  is  the  question.” 

Southern  Pacific  Co.  v.  Interstate  Commerce  Commission  (1911),  219  U.  S.,  433, 
442,  443: 

“ * * * the  proposition  relied  upon  to  secure  reversal  is  that  the  court  below 
should  have  set  aside  the  order  of  the  commission  because  that  order  was  in  excess  of 
the  power  conferred  upon  the  commission,  and  this,  it  is  insisted,  is  to  be  determined 
by  substance  and  not  mere  form.  In  other  words,  the  contention  is  that  although  the 

46985—21 34 


530 


MEAT  PACKER. 


order  made  by  the  commission  may  have  been  couched  in  a form  which  would  cause 
it,  superficially  considered,  to  appear  to  be  but  the  exercise  of  an  authority  to  correct 
an  unreasonable  rate’  yet  if  it  plainly  results  from  the  record,  that  the  order  of  the  com- 
mission was  not  the  exercise  of  such  an  authority,  but  was  based  upon  the  assumption 
by  that  bod^  of  the  possession  of  a power  not  conferred  by  law  the  mere  form  given  by 
the  commission  to  its  action  does  not  relieve  the  courts  from  the  duty  of  reviewing  and 
correcting  an  abuse  of  power.  Applying  these  propositions,  the  insistence  is  that  both 
in  form  and  in  substance  the  order  of  the  commission  is  void,  because  it  manifests  that 
the  body  did  not  merely  exert  the  power  conferred  by  law  to  correct  an  unjust  and 
unreasonable  rate,  but  that  it  made  the  order  which  is  complained  of  upon  the  theory 
that  the  power  was  possessed  to  set  aside  a just  and  reasonable  rate  lawfully  fixed  by  a 
railroad  whenever  the  commission  deemed  that  it  would  be  equitable  to  shippers  in  a 
particular  district  to  put  in  force  a reduced  rate.  That  is  to  say,  the  contention  is  that 
the  order  entered  by  the  commission  shows  on  its  face  that  that  body  assumed  that  it 
had  power  not  merely  to  prevent  the  charging  of  unjust  and  unreasonable  rates,  but 
also  to  regulate  and  control  the  general  policy  of  the  owners  of  railro'ads  as  to  fixing 
rates,  and  consequently  that  there  was  authority  to  substitute  for  a just  and  reasonable 
rate  one  which  in  and  of  itself  in  a legal  sense  might  be  unjust  and  unreasonable,  if  the 
commission  was  satisfied  that  it  was  a wise  policy  to  do  so  or  because  a railroad  has  so 
conducted  itself  as  to  be  estopped  in  the  future  from  being  entitled  to  receive  a just 
and  reasonable  compensation  for  the  service  rendered.’ ’ 

Federal  Trade  Commission  v.  Gratz  (1920),  250  U.  S.,  421: 

“The  words  ‘unfair  method  of  competition’  are  not  defined  by  the  statute,  and 
their  exact  meaning  is  in  dispute.  It  is  for  the  courts  ,not  the  commission,  ultimately 
to  determined  as  matter  of  law  what  they  include.” 

It  is  also  settled  by  the  Supreme  Court  that  the  findings  of  fact  must,  as  a matter 
of  law,  sustain  the  order  (Louisville  & Nashville  R.  R.  Co.  v.  United  States,  238  U.  S.. 
11;  Great  Northern  Railway  v.  Minnesota,  238  U.  S.,  340f,  and  that  the  order  is  void 
if  there  is  no  evidence  to  support  the  order  (Florida  Fast  Coast  Line  v.  United  States, 
234  U.  S.,  167),  or  if  the  commission  assumes  powers  not  granted  it  (Southern  Pacific 
Co.  v.  Interstate  Commerce  Commission,  219  U.  S.,  433),  or  if  the  discrimination  found 
by  the  commission  is  not  as  a matter  of  law  unjust  (Interstate  Commerce  Commission 
v.  Diffenbaugh,  222  U.  S.,  42;  Louisville  & Nashville  R.  R.  Co.  v.  United  States,  242 
U.  S.,  60);  and  the  Federal  courts  are  always  open  to  a person  complaining  that  his 
property  has  been  taken  without  due  process  (Louisville  & Nashville  R.  R.  v.  Garnett, 
231  U.  S.,  311;  Home  Tel.  Co.  v.  Los  Angeles,  211  U,  S.,  278). 

On  the  other  hand,  the  whole  purpose  of  enforcement  of  law  through  an  adminis- 
trative body  is  to  afford  an  agency  better  equipped  with  the  time,  accumulated  expe- 
rience, and  peculiar  technical  knowledge  necessary  to  determine  violations  of  a par- 
ticular phase  of  the  law,  rather  than  to  provide  a mere  instrument  to  collect  evidence 
for  the  courts.  For  this  reason  the  court’s  judgment  upon  the  administrative  deter- 
mination will  not  in  every  case  be  substituted  for  that  of  the  administrative  body, 
but  only  when  the  determination  is  void  as  a matter  of  law,  or  is  arbitrary  or  unfair  in 
view  of  the  facts  upon  which  it  is  based. 

United  States  v.  Louisville  & Nashville  R.  R.  Co.  (1914),  235  U.  S.,  314,  320,  321. 

“The  Commerce  Court,  finding  that  there  was  no  conflicting  or  disputed  evidence 
concerning  the  origin  and  character  of  the  reshipping  privilege,  concluded  that 
whether  such  privilege  was  an  undue  preference  was  not  a matter  of  fact,  but  a ques- 
tion of  law,  upon  which  it  was  its  duty  to  reach  an  independent  conclusion.  The 
court,  therefore,  among  other  considerations  because  the  privilege  was  of  long  stand- 
ing and  was  justified  by  water  at  Nashville,  declared  it  to  be  not  unlawful  and  not 
preferential.  A peremptory  injunction  was  allowed  restraining  the  enforcement  of 
the  order  of  the  commission.  And  the  correctness  of  this  action  is  the  question  here 
for  decision. 

“In  view  of  the  doctrine  announced  in  Interstate  Com.  Com.  v.  Illinois  Cent.  R.  R. 
(215  U.  S.,  452),  Interstate  Com.  Com.  v.  Delaware,  L.  & W.  R.  Co.  (220  U.  S.,  235), 
Interstate  Com.  Com.  v.  Louisville  & Nashville  R.  R.  (227  U.  S.,  88),  it  plainly  re- 
sults that  the  court  below,  in  substituting  its  judgment  as  to  the  existence  of  prefer- 
ence for  that  of  the  commission  on  the  ground  that  where  there  was  no  dispute  as  to 
the  facts  it  had  a right  to  do  so,  obviously  exerted  an  authority  not  conferred  upon  it 
by  the  statute.  It  is  not  disputable  that  from  the  beginning  the  very  purpose  for 
which  the  commission  was  created  was  to  bring  into  existence  a body  which  from  its 
peculiar  character  would  be  most  fitted  to  primarily  decide  whether  from  the  facts, 
disputed  or  undisputed,  in  a given  case  preference  or  discrimination  existed.  (East 
Tenn.,  etc.,  Ry.  Co.  v.  Interstate  Com.  Com.,  181  U.  S.,  1,  23029.)  And  the  amend- 
ments by  which  it  came  to  pass  that  the  findings  of  the  commission  were  made  not 
merely  prima  facie  but  conclusively  correct  in  case  of  judicial  review,  except  to  the 
extent  pointed  out  in  the  Illinois  Central  and  other  cases,  supra,  show  the  progres- 


MEAT  PACKER. 


531 


sive  evolution  of  the  legislative  purpose  and  the  inevitable  conflict  which  exists 
between  giving  that  purpose  effect  and  upholding  the  view  of  the  statute  taken  by 
the  court  below.  It  can  not  be  otherwise,  since  if  the  view  of  the  statute  upheld 
below  be  sustained  the  commission  would  become  but  a mere  instrument  for  the  pur- 
pose of  taking  testimony  to  be  submitted  to  the  courts  for  their  ultimate  action.” 

Pennsylvania  Co.  v.  United  States  (1915),  236  U.  S.,  351,  361: 

“This  section  forbids  any  undue  or  unreasonable  preference  or  advantage  in  favor 
of  any  person,  company,  firm,  corporation,  or  locality;  what  is  such  undue  or  un- 
reasonable preference  or  advantage  is  a question  not  of  law  but  of  fact.  (Texas  & 
Pacific  Ry.  v.  Interstate  Commerce  Commission,  162  U.  S.,  197,  219;  Interstate  Com- 
merce Commission  v.  Alabama  Midland  Railway,  168  U.  S.,  144,  170.)  If  the  order 
made  by  the  commission  does  not  contravene  any  constitutional  limitation  and  is 
within  the  constitutional  and  statutory  authority  of  that  body,  and  not  unsupported 
by  testimony,  it  can  not  be  set  aside  by  the  courts,  as  it  is  only  the  exercise  of  an 
authority  which  the  law  vests  in  the  commission  (Interstate  Commerce  Commission 
v.  Delaware,  Lackawanna  & Western  R.  R.,  220  U.  S.,  235,  251;  Los  Angeles  Switch- 
ing case,  234  U.  S.,  294,  311;  Houston  & Texas  Ry.  v.  United  States,  234  U.  S.,  342, 
359).” 

Skinner  & Eddy  Corporation  v.  United  States  (1919),  249  U.  S.,  557,  562,  563. 

“This  contention  proceeds  apparently  upon  a misapprehension  of  the  plaintiff’s 
position.  If  the  plaintiff  had  sought  relief  against  a rate  or  practice  alleged  to  be 
unjust  because  unreasonably  high  or  discriminatory,  the  remedy  must  have  been 
sought  primarily  by  proceeding  before  the  commission  (Loomis  v.  Lehigh  Valley  R.  R. 
Co.,  240  U.  S.,  43,  50;  Texas  & Pacific  Ry.  Co.  v.  American  Tie  & Timber  Co.,  234 
U.  S.,  138,  416;  Minnesota  Rate  cases,  230  U.  S.,  352,  419;  Robinson  v.  Baltimore  & 
Ohio  R.  R.  Co.,  222  U.  S.,  506;  Baltimore  & Ohio  R.  R.  Co.  v.  Pitcairn  Coal  Co.,  215 
U.  S.,  481)  and  the  finding  thereon  would  have  been  conclusive,  unless  there  was 
lack  of  substantial  evidence,  some  irregularity  in  the  proceedings,  or  some  error  in 
the  application  of  rules  of  law  (Manufacturers  Ry.  Co.  v.  United  States,  246  U.  S., 
457,  482;  Pennsylvania  Co.  v.  United  States,  236  U.  S.,  251,  361;  Los  Angeles  Switch- 
ing case,  234  U.  S.,  294,  311;  Kansas  City  Southern  Ry.  Co.  v.  United  States,  231 
U.  S.,  423,  440;  Procter  & Gamble  Co.  v.  United  States,  225  U.  S.,  282,  297-298;  Inter- 
state Commerce  Commission  v.  Union  Pacific  R.  R.  Co.,  222  U.  S.,  541).  But  the 
plaintiff  does  not  contend  that  75  cents  is  an  unreasonably  high  rate  or  that  it  is  dis- 
criminatory or  that  there  was  mere  error  in  the  action  of  the  commission.  The  con- 
tention is  that  the  commission  has  exceeded  its  statutory  powers;  and  that,  hence,  the 
order  is  void.  In  such  a case  the  courts  have  jurisdiction  of  suits  to  enjoin  the  en- 
forcement of  an  order,  even  if  the  plaintiff  has  not  attempted  to  secure  redress  in  a 
proceeding  before  the  commission.  (Interstate  Commerce  Commission  v.  Diffenbaugh, 
222  U.  S.,  42,  49;  Louisiana  & Pacific  Ry.  Co.  v.  United  States,  209  Fed.  Rep.,  244,  251; 
Atlantic  Coast  Line  R.  R.  Co.  v.  Interstate  Commerce  Commission,  194  Fed.  Rep., 
449,  451.)  The  Sacramento  case,  supra,  was  a case  of  this  character.  Compare 
Interstate  Commerce  Commission  v.  Louisville  & Nashville  R.  R.  Co.  (227  U.  S., 
88,  92);  Southern  Pacific  Co.  v.  Interstate  Commerce  Commission  (219  U.  S.,  433).” 

Manufacturers  Railway  Co.  v.  United  States  (1918),  246  U.  S.,  457,  481,  482. 

“ Whether  a preference  or  advantage  or  discrimination  is  undue  or  unreasonable  or 
unjust  is  one  of  {hose  questions  of  fact  that  have  been  confided  by  Congress  to  the 
judgment  and  discretion  of  the  commission  (Interstate  Commerce  Commission  v. 
Alabama  Midland  Ry.  Co.,  168  U.  S.,  144,  170),  and  upon  which  its  decisions,  made 
the  basis  of  administrative  orders  operating  in  futuro,  are  not  to  be  disturbed  by  the 
courts,  except  on  a showing  that  they  are  unsupported  by  evidence,  were  made 
without  a hearing,  exceed  constitutional  limits,  or  for  some  other  reason  amount  to 
an  abuse  of  power.  This  results  from  the  provisions  of  sections  15  and  16  of  the  com- 
merce act  as  amended  in  1906  and  1910  (34  Stat.,  589-591,  c.  3591;  36  Stat.,  551-554, 
c.  309),  expounded  in  familiar  decisions.  (Interstate  Commerce  Commission  v. 
Illinois  Central  R.  R.  Co.,  215  U.  S.,  452,  469-470;  Interstate  Commerce  Commission  v. 
Union  Pacific  R.  R.  Co.,  22  U.  S.,  541,  547;  Procter  & Gamble  Co.  v.  United  States, 
225  U.  S.,  282,  297-298;  Interstate  Commerce  Commission  v.  Louisville  & Nashville 
R.  R.  Co.,  227  U.  S.,  88,  91.) 

“In  the  present  case  the  negative  finding  of  the  commission  upon  the  question  of 
undue  discrimination  was  based  upon  a consideration  of  the  different  conditions  of 
location,  ownership,  and  operation  as  between  the  railway  and  the  terminal.  (28 
I.  C.  C.,  104,  105;  32  I.  C.  C.,  102.)  The  conclusions  were  reached  after  full  hearing, 
are  not  without  support  in  the  evidence,  and  we  are  unable  to  say  that  they  show  an 
abuse  of  discretion.  It  may  be  conceded  that  the  evidence  would  have  warranted  a 
different  finding;  indeed,  the  first  report  of  the  commission  was  to  the  contrary;  but 
to  annul  the  commission’s  order  on  this  ground  would  be  to  substitute  the  judgment 


532 


MEAT  PACKER. 


of  a court  for  the  judgment  of  the  commission  upon  a matter  purely  administrative, 
and  this  can  not  be  done.  (United  States  v.  Louisville  & Nashville  R.  R.  Co.,  235 
U.  S.,  314,  320;  Pennsylvania  Co.  v.  United  States,  236  U.  S.,  351,  361.)  The  common 
use  of  the  St.  Louis  Terminal  by  the  14  trunk  lines  under  a single  arrangement  as  to 
absorption  of  the  terminal  charges  does  not,  as  matter  of  law,  entitle  the  railway,  which 
has  no  trunk  line  and  does  terminal  switching  alone,  to  precisely  the  same  treatment. 
(United  States  v.  St.  Louis  Terminal,  224  U.  S.,  383,  405,  406;  Louisville  & Nashville 
R.  R.  Co.  v.  United  States,  242  U.  S.,  60.)” 

Constitutionality  of  Regulation  of  Stockyards. 

It  may  be  argued  that  the  attempt  to  regulate  transactions  in  stockyards  is  uncon- 
stitutional on  the  ground  that  these  transactions  take  place  after  the  live  stock  has 
ceased  to  move  in  interstate  commerce,  and  reliance  may  be  placed  upon  the  case 
of  Hopkins  v.  United  States  (171  U.  S.,  578),  in  which  it  was  held  that  the  Sherman 
Antitrust  Act  did  not  include  the  acts  of  a live-stock  exchange  composed  of  commis- 
sion men  doing  business  at  a stockyard  and  selling  on  commission  consignments  of 
cattle  from  another  State  on  the  ground  that  this  business  was  not  interstate  commerce. 
A careful  examination  of  the  opinion,  however,  shows  that  the  court  was  of  the  opinion 
that  the  acts  of  the  defendants  had  only  an  incidental  effect  on  interstate  commerce 
in  the  absence  of  proof  that  the  charges  for  the  services  were  exorbitant,  and  the 
court  clearly  intimated  that  Congress  would  have  authority  to  prohibit  unreasonable 
charges  and  hence  unfair  practices.  Furthermore,  the  force  of  the  decision,  even  if 
adverse,  is  greatly  lessened  by  subsequent  decisions  of  the  court.  In  Field  v.  Bar- 
ber Asphalt  Co.  (194  U.  S.,  623)  it  seems  apparent  that  the  Hopkins  case  is  construed 
by  the  Supreme  Court  to  hold  that  for  the  purposes  only  of  the  antitrust  act  commis- 
sion merchants  are  not  engaged  in  interstate  commerce,  the  case  being  cited  in  sup- 
port of  the  proposition  ‘‘that  the  antitrust  act  is  not  intended  to  affect  contracts  which 
have  a remote  and  indirect  bearing  on  commerce  between  the  States.  ” In  Loewe 
v.  Lawlor  (208  U.  S.,  297)  the  court  says  that  it  does  not  “pause  to  comment  on  cases 
such  as”  the  Hopkins  case  “in  which  the  facts  show  that  the  purpose  of  the  agree- 
ment was  not  to  obstruct  or  restrain  interstate  commerce.  The  object  and  intention 
of  the  combination  determines  its  legality.  ” 

In  Standard  Oil  Co.  v.  United  States  (221  U.  S.,  66),  the  Hopkins  case  is  cited  as 
showing  that  the  rule  of  reason  has  always  been  applied  by  the  Supreme  Court.  In 
Bacon  v.  Illinois  (227  U.  S.,  516),  which  sustained  a State  tax  on  grain,  although  the 
grain  in  question  had  been  removed  in  transit  for  inspecting  and  weighing,  the  court 
said  “the  question,  it  should  be  observed,  is  not  with  respect  to  the  extent  of  the 
power  of  Congress  to  regulate  interstate  commerce,  but  whether  a particular  exercise 
of  such  power  in  view  of  its  nature  and  operation  must  be  deemed  to  be  in  conflict 
with  this  paramount  authority.”  A clear  intimation  that,  while  the  acts  of  commis- 
sion merchants  and  others  furnishing  services  at  stockyards  were  not  within  the  scope 
of  the  Sherman  Antitrust  Act,  they  are  not  necessarily  beyond  the  regulatory  power 
of  Congress,  is  found  in  the  recent  case  of  United  States  v.  Ferger  (250  U.  S.,  199), 
which  sustained  an  indictment  for  issuing  a fraudulent  bill  of  lading  in  interstate 
commerce.  The  court  said,  at  page  203: 

“*  * * it  is  insisted  that  as  there  was  and  could  be  no  commerce  in  a fraudulent 
and  fictitious  bill  of  lading,  therefore  the  power  of  Congress  to  regulate  commerce 
could  not  embrace  such  pretended  bill.  But  this  mistakenly  assumes  that  the  power 
of  Congress  is  to  be  necessarily  tested  by  the  intrinsic  existence  of  commerce  in  the 
particular  subject  dealt  with,  instead  of  by  the  relation  of  that  subject  to  commerce 
and  its  effect  upon  it.  We  say  mistakenly  assumes,  because  we  think  it  clear  that  if 
the  proposition  were  sustained  it  would  destroy  the  power  of  Congress  to  regulate,  as 
obviously  that  power,  if  it  is  to  exist,  must  include  the  authority  to  deal  with  obstruc- 
tion to  interstate  commerce  (In  re  Debs,  158  U.  S.,  564)  and  with  a host  of  other  acts 
which,  because  of  their  relation  to  and  influence  upon  interstate  commerce,  come 
within  the  power  of  Congress  to  regulate,  although  they  are  not  interstate  commerce  in 
and  of  themselves.  ” 

In  Swift  v.  United  States  (196  U.  S.,  375),  it  is  said  that  in  the  Hopkins  case  the 
question  was  left  open  as  to  what  would  have  been  the  result  if  the  combination  had 
resulted  in  exorbitant  charges.  The  case  also  lays  down  the  important  doctrint  that: 
“When  cattle  are  sent  for  sale  from  a place  in  one  State,  with  the  expectation  that 
they  will  end  their  transit,  after  purchase,  in  another,  and  when  in  effect  they  do  so, 
with  only  the  interruption  necessary  to  find  a purchaser  at  the  stockyards,  and  when 
this  is  a typical,  constantly  recurring  course,  the  current  thus  existing  is  a current  of 
commerce  among  the  States,  and  the  purchase  of  the  cattle  is  a part  and  incident  of 
such  commerce.” 


MEAT  PACKER. 


533 


The  committee  amendment  makes  it  clear  that  Congress  in  treating  this  question 
is  attempting  to  regulate  evils  which  it  has  found  to  exist  in  respect  to  exorbitant 
charges  and  unreasonable  practices  on  the  stockyards,  resulting  in  a direct  burden 
upon  interstate  commerce,  and  that  in  the  whole  bill  it  is  treating  the  entire  slaugh- 
tering and  meat-packing  industry  in  all  its  ramifications  as  part  of  the  “current  of 
commerce”  referred  to  in  the  Swift  case.  The  committee  amendment  in  its  defini- 
tions in  section  2 repeats  the  language  of  the  Swift  case  and  contains  a declaration 
“articles  normally  in  such  current  or  commerce  shall  not  be  considered  out  of  such 
current  through  resort  being  had  to  any  means  or  device  intended  to  remove  transac- 
tions in  respect  thereto  from  the  provisions  of  this  act.”  This  clearly  expresses  the 
intention  of  Congress  that  all  devices,  whether  skillful  manipulation  of  corporate 
organization,  or  the  setting  up  of  dummies,  or  otherwise,  should  not  result  in  an 
evasion  of  the  act.  If  this  great  industry,  bearing  so  important  a relation  to  the 
welfare  of  the  Nation,  and  constituting  so  large  a part  of  interstate  commerce,  can 
escape  the  power  of  Congress  by  such  devices,  the  power  granted  by  the  Constitution 
to  regulate  interstate  commerce  means  nothing,  a conclusion  which  the  committee 
can  not  bring  itself  to  believe  is  true. 

Need  for  Legislation. 

In  reference  to  the  need  for  specific  legislation  to  regulate  and  control  the  slaugh- 
tering and  meat  packing  industry  in  such  manner  as  to  protect  producers  of  live  stock , 
independent  of  packers,  and  consumers  from  discrimination,  abuse,  and  oppression 
by  means  of  conspiracies,  combinations,  or  other  methods,  the  report  of  the  Federal 
Trade  Commission  and  the  printed  reports  of  the  hearings  before  the  committee, 
containing  approximately  3,000  pages,  clearly  indicate  its  need. 

The  letter  from  the  Federal  Trade  Commission  to  the  President,  transmitting  its 
report  one  year  ago  states: 

“On  February  7,  1917,  you  directed  the  Federal  Trade  Commission  to  ‘investigate 
and  report  facts  relating  to  the  production,  ownership,  manufacture,  storage,  and  dis- 
tribution of  foodstuffs  and  the  products  or  by-products  arising  from  or  in  connection 
with  their  preparation  and  manufacture;  to  ascertain  the  facts  bearing  on  alleged 
violations  of  the  antitrust  acts,  and  particularly  upon  the  question  whether  there  are 
manipulations,  controls,  trusts,  combinations,  conspiracies,  or  restraints  of  trade  out 
of  harm.ony  with  the  law  or  the  public  interests,’  to  the  end  that  ‘proper  remedies, 
legislative  or  administrative,  may  be  applied’  (p.  23). 

“Answering  directly  your  question  as  to  whether  or  not  there  exists  ‘monopolies, 
controls,  trusts,  combinations,  conspiracies,  or  restraints  of  trade  out  of  harmony  with 
the  law  and  the  public  interest,’  we  have  found  conclusive  evidence  that  warrants 
an  unqualified  affirmative  (p.  23). 

“It  appears  that  five  great  packing  concerns  of  the  country — Swift,  Armour,  Morris, 
Cudahy,  and  Wilson — have  attained  such  a dominant  position  that  they  control  at  will 
the  market  in  which  they  buy  their  supplies,  the  market  in  which  they  sell  their 
products,  and  hold  the  fortunes  of  their  competitors  in  their  hands  (p.  24). 

‘ ‘ The  combination  has  not  stopped  at  the  most  minute  integration  but  has  gone  on 
into  a stage  of  conglomeration,  so  that  unrelated  heterogeneous  enterprises  are  brought 
under  control  (p.  24).” 

The  summary  of  the  report  of  the  Federal  Trade  Commission  states: 

“Five  corporations — Armour  & Co.,  Swift  & Co  , Morris  & Co.,  Wilson  & Co.  (Inc.), 
and  the  Cudahy  Packing  Co. — hereafter  referred  to  as  the  Big  Five  or  the  packers, 
together  with  their  subsidiaries  and  affiliated  companies,  not  only  have  a monopolistic 
control  over  the  American  meat  industry,  but  have  secured  control,  similar  in  purpose 
if  not  yet  in  extent,  over  the  principal  substitutes  for  meat,  such  as  eggs,  cheese,  and 
vegetable-oil  products,  and  are  rapidly  extending  their  power  to  cover  fish  and  nearly 
every  kind  of  foodstuff. 

“In  addition  to  these  immense  properties  in  the  United  States,  the  Armour,  Swift, 
Morris,  and  Wilson  interests,  either  separately  or  jointly,  own  or  control  more  than 
half  of  the  export-meat  production  of  the  Argentine,  Brazil,  and  Uruguay,  and  have 
large  investments  in  other  surplus  meat-producing  countries,  including  Australia 
(P-  31). 

“The  monopolistic  position  of  the  Big  Five  is  based  not  only  upon  the  large  pro- 
portion of  the  meat  business  which  they  handle,  ranging  from  61  to  86  per  cent  in  the 
principal  lines,  but  primarily  upon  their  ownership,  separately  or  jointly,  of  stock - 
yards,  car  lines,  cold-storage  plants,  branch  houses,  and  the  otner  essential  facilities 
for  the  distribution  of  perishable  foods. 

“The  control  of  these  five  great  corporations,  furthermore,  rests  in  the  hands  of  a 
small  group  of  individuals,  namely,  J.  Ogden  Armour,  the  Swift  brothers,  the  Morris 


534 


MEAT  PACKER. 


brothers,  Thomas  E.  Wilson  (acting  under  the  veto  of  a small  group  of  bankers),  and 
the  Cudahys  (p.  31). 

“The  combination  among  the  Big  Five  is  not  a casual  agreement  brought  about  by 
indirect  and  obscure  methods,  but  a definite  and  positive  conspiracy  for  the  purpose 
of  regulating  purchases  of  live  stock  and  controlling  the  price  of  meat,  the  terms  of  the 
conspiracy  being  found  in  certain  documents  which  are  in  our  possession  (p.  32). 

. “The  committee  found,  among  other  things,  that  there  was  collusion  with  regard  to 
the  fixing  of  prices  and  the  division  of  territory  and  business.  The  conditions  revealed 
by  this  investigation,  it  may  be  remarked,  were  in  part  responsible  for  the  passage  of 
the  Sherman  Antitrust  Act  on  July  2,  1890. 

“This  investigation  and  the  passage  of  the  Sherman  Act,  however,  did  not  long  pre- 
vent the  big  packers  from  combining,  for  it  was  admitted  by  Henry  Veeder,  under 
oath,  in  1912,  that  from  May,  1893,  until  May,  1896,  representatives  of  the  leading 
packing  companies,  Armour  & Co.,  Armour  Packing  Co.,  Cudahy  Packing  Co.,  G.  H. 
Hammond  Packing  Co.,  East  St.  Louis  Dressed  Beef  & Provision  Co.,  Morris  & Co., 
and  Swift  & Co.,  met  regularly  every  Tuesday  afternoon  in  a suite  of  rooms  leased 
in  the  name  of  Henry  Veeder  (p.  46).  ” 

On  June  29,  1918,  the  Federal  Trade  Commission,  in  response  to  Senate  resolution 
of  June  10,  1918,  transmitted  a report  (Doc.  248,  65th  Cong.,  2d  sess.)  containing 
facts,  figures,  data,  and  information  then  in  possession  of  the  commission  relative  to 
profiteering.  On  page  7 it  shows  that — 

“Five  meat  packers — Armour,  Swift,  Morris,  Wilson,  and  Cudahy — and  their  sub- 
sidiary and  affiliated  companies  have  monopolistic  control  of  the  meat  industry  and 
are  reaching  for  like  domination  in  other  products.  Their  manipulations  of  the 
market  embrace  every  device  that  is  useful  to  them,  without  regard  to  law.  Their 
reward,  expressed  in  terms  of  profit,  reveals  that  four  of  these  concerns  have  pocketed 
in  1915,  1916,  and  1917,  $140,000,000.  However  delicate  a definition  is  framed  for 
‘profiteering,’  these  packers  have  preyed  upon  the  people  unconscionably.  They 
are  soon  to  come  under  further  governmental  regulation  approved  by  Executive 
order.  ” 

(There  is  printed  as  follows  the  bill  finally  agreed  to  and  favorably 
reported:) 

On  page  14  it  states  that — 

“Of  the  astounding  figure  of  $140,000,000,  $121,000,000  represents  excess  over  their 
prewar  profit,  and  that  the  profit  taken  by  Morris  & Co.  for  the  fiscal  year  ending 
November  1,  1917,  is  equal  to  263.7  per  cent  on  its  $3,000,000  outstanding  capital 
stock.” 

In  reference  to  whether  the  antitrust  laws  are  adequate  to  meet  existing  conditions, 
there  is  quoted  from  the  hearings  before  this  committee  (pp.  2355,  2356)  the  following: 

“The  Chairman.  Let  me  ask  you  one  question  as  to  legislation.  Do  you  consider 
that  the  present  antitrust  laws  are  adequate  to  meet  the  situation  outside  of  the 
decree? 

“Attorney  General  Palmer.  Well,  Mr.  Chairman.  I have  not  got  as  much  confidence 
in  the  Sherman  antitrust  law  as  I used  to  have.  We  do  not  seem  to  be  able  to  bring 
cases  which  the  Government  believes  are  combinations  within  its  terms,  according 
to  the  judgment  of  the  Supreme  Court.  Yet  I accept  that  judgment  as  the  final  deter- 
mination as  to  what  the  law  is.  I am  still  hopeful  that  under  it  most  of  the  combina- 
tions in  restraint  of  trade  that  the  Government  has  attacked  can  be  successfully 
enjoined  or  punished. 

******* 

“The  Chairman.  If  it  is  possible  to  convict  others,  isn’t  is  possible  to  make  a law 
to  convict  the  packers? 

“Attorney  General  Palmer.  I did  not  say  business  men  had  not  gone  to  jail.  I 
said  that  under  the  Sherman  antitrust  law  no  business  man  had  been  sent  to  jail.  I 
think  that  is  a correct  statement.  I think  it  is  also  a correct  statement  to  say  that 
not  more  than  five  or  six  persons  have  gone  to  jail  under  the  Sherman  antitrust  law, 
and  those  for  very  minor  sentences,  and  they  were  persons  who  were  con  victed  under 
that  law  for  acts  while  in  restraint  of  trade  or  tending  toward  a monopoly,  were  acts 
we  do  not  understand  to  be  part  of  these  business  problems.  Now,  1 made  that 
reference  simply  to  cite  the  history  of  the  Sherman  antitrust  law;  to  show  the  chances 
the  Government  would  take  if  it  undertook  to  go  on  the  criminal  side  of  the  courts 
to  get  a remedy  in  this  case.  I did  not  say  it  for  the  purpose  of  criticizing  the  Sherman 
antitrust  law;  that  is  not  the  fault  of  the  law.” 


MEAT  PACKER. 


535 


Meat  Packer  Bill . 


67  th  CONGRESS, 
1st  Session. 


II.  R. 


IN  THE  HOUSE  OF  REPRESENTATIVES. 

May  — , 1921. 

Mr.  Haugen  introduced  the  following  bill;  which  was  referred  to  the  Committee  on 
Agriculture  and  ordered  to  be  printed. 


A BILL 

To  regulate  interstate  and  foreign  commerce  in  live  stock,  live-stock  products,  dairy 
products,  poultry,  poultry  products,  and  eggs,  and  for  other  purposes. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  of  the  United  States  of  America 
in  Congress  assembled , 

Title  I. — Definitions. 

This  Act  may  be  cited  as  the  “ Packers  and  Stockyards  Act,  1921.” 

Sec.  2.  (a)  When  used  in  this  Act — 

(1)  The  term  “person”  includes  individuals,  partnerships,  corporations,  and 
associations; 

(2)  The  term Secretary  ” means  the  Secretary  of  Agriculture; 

(3)  The  term  “meat  food  products”  means  all  products  and  by-products  of  the 
slaughtering  and  meat-packing  industry — if  edible; 

(4)  The  term  “livestock”  means  cattle,  sheep,  swine,  horses,  mules,  or  goats, — 
whether  live  or  dead; 

(5)  The  term  “live-stock  products”  means  all  products  and  by-products  (other 
than  meats  and  meat  food  products)  of  the  slaughtering  and  meat-packing  industry 
derived  in  whole  or  in  part  from  live  stock;  and 

(6)  The  term  “commerce”  means  commerce  between  any  State,  Territory,  or 
possession,  or  the  District  of  Columbia,  and  any  place  outside  thereof;  or  between 
points  within  the  same  State,  Territory,  or  possession,  or  the  District  of  Columbia, 
but  through  any  place  outside  thereof;  or  within  any  Territory  or  possession,  or  the 
District  of  Columbia. 

(b)  For  the  purpose  of  this  act  (but  not  in  any  wise  limiting  the  foregoing  definition) 
a transaction  in  respect  to  any  article  shall  be  considered  to  be  in  commerce  if  such 
article  is  part  of  that  current  of  commerce  usual  in  the  live-stock  and  meat-packing 
industries,  whereby  live  stock,  meats,  meat  food  products,  live-stock  products,  dairy 
products,  poultry,  poultry  products,  or  eggs,  are  sent  from  one  State  with  the  expecta- 
tion that  they  will  end  their  transit,  after  purchase,  in  another,  including,  in  addition 
to  cases  within  the  above  general  description,  all  cases  where  purchase  or  sale  is  either 
for  shipment  to  another  State,  or  for  slaughter  of  live  stock  within  the  State  and  the 
shipment  outside  the  State  of  the  products  resulting  from  such  slaughter.  Articles 
normally  in  such  current  of  commerce  shall  not  be  considered  out  of  such  current 
through  resort  being  had  to  any  means  or  device  intended  to  remove  transactions  in 
respect  thereto  from  the  provisions  of  this  act.  For  the  purpose  of  this  paragraph 
the  word  “ State”  includes  Territory,  the  District  of  Columbia,  possession  of  the 
United  States,  and  foreign  nation. 

Title  II. — Packers. 

Sec.  201.  When  used  in  this  act — 

The  term  “packer”  means  any  person  engaged  in  the  business  (a)  of  buying  live 
stock  in  commerce  for  purposes  of  slaughter,  or  (b)  of  manufacturing  or  preparing  meats 
or  meat  food  products  for  sale  or  shipment  in  commerce,  or  (c)  of  manufacturing  or 
preparing  live-stock  products  for  sale  or  shipment  in  commerce,  or  (d)  of  marketing 


536 


MEAT  PACKER. 


meats,  meat  food  products,  live-stock  products,  dairy  products,  poultry,  poultry 
products,  or  eggs,  in  commerce;  but  no  person  engaged  in  such  business  of  manu- 
facturing or  preparing  live-stock  products  or  in  such  marketing  business  shall  be 
considered  a packer  unless — 

(1)  Such  person  is  also  engaged  in  any  business  referred  to  in  clause  (a)  or  (b)  above, 
or  unless 

(2)  Such  person  owns  or  controls,  directly  or  indirectly,  through  stock  ownership 
or  control  or  otherwise,  by  himself  or  through  his  agents,  servants,  or  employees,  any 
interest  in  any  business  referred  to  in  clause  (a)  or  (b)  above,  or  unless 

(3)  Any  interest  in  such  business  of  manufacturing  or  preparing  live-stock  products, 
or  in  such  marketing  business  is  owned  or  controlled,  directly  or  indirectly,  through 
stock  ownership  or  control  or  otherwise,  by  himself  or  through  his  agents,  servants,  or 
employees,  by  any  person  engaged  in  any  business  referred  to  in  clause  (a)  or  (b)  above, 
or  unless 

(4)  Any  person  or  persons  jointly  or  severally,  directly  or  indirectly,  through  stock 
ownership  or  control  or  otherwise,  by  themselves  or  through  their  agents,  servants,  or 
employees,  own  or  control  in  the  aggregate  20  per  centum  or  more  of  the  voting  power 
or  control  in  such  business  of  manufacturing  or  preparing  live-stock  products,  or  in 
such  marketing  business  and  also  20  per  centum  or  more  of  such  power  or  control  in 
any  business  referred  to  in  clause  (a)  or  (b)  above. 

Sec.  202.  It  shall  be  unlawful  for  any  packer  to: 

(a)  Engage  in  or  use  any  unfair,  unjustly  discriminatory,  or  deceptive  practice  or 
device  in  commerce;  or 

(b)  Make  or  give,  in  commerce,  any  undue  or  unreasonable  preference  or  advan- 
tage to  any  particular  person  or  locality  in  any  respect  whatsoever,  or  subject,  in  com- 
merce, any  particular  person  or  locality  to  any  undue  or  unreasonable  prejudice  or 
disadvantage  in  any  respect  whatsoever;  or 

(c)  Sell  or  otherwise  transfer  to  or  for  any  other  packer,  or  buy  or  otherwise  receive 
from  or  for  any  other  packer,  any  article  for  the  purpose  or  with  the  effect  of  appor- 
tioning the  supply  in  commerce  between  any  such  packers,  if  such  apportionment 
has  the  tendency  or  effect  of  restraining  commerce  or  of  creating  a monopoly  in  com- 
merce; or 

(d)  Sell  or  otherwise  transfer  to  or  for  any  other  person,  or  buy  or  otherwise  receive 
from  or  for  any  other  person,  any  article  for  the  purpose  or  with  the  effect  of  manipu- 
lating or  controlling  prices  in  commerce,  or  of  creating  a monopoly  in  the  acquisition 
of,  buying,  selling,  or  dealing  in,  any  article  in  commerce,  or  of  restraining  com- 
merce; or 

(e)  Engage  in  any  course  of  business  or  do  any  act  for  the  purpose  or  with  the  effect 
of  manipulating  or  controlling  prices  in  commerce,  or  of  creating  a monopoly  in  the 
acquisition  of,  buying,  selling,  or  dealing  in,  any  article  in  commerce,  or  of  restrain- 
ing commerce;  or 

(f)  Conspire,  combine,  agree,  or  arrange  with  any  other  person  (1)  to  apportion 
territory  for  carrying  on  business  in  commerce,  or  (2)  to  apportion  purchases  or  sales 
of  any  article  in  commerce,  or  (3)  to  manipulate  or  control  prices  in  commerce;  or 

(g)  Conspire,  combine,  agree  or  arrange  with  any  other  person  to  do,  or  aid  or  abet 
the  doing  of,  any  act  made  unlawful  by  subdivision  (a),  fb),  (c),  (d),  or  (e). 

Sec.  203.  (a^  Whenever  the  Secretary  has  reason  to  believe  that  any  packer  has 
violated  or  is  violating  any  provision  of  this  title,  he  shall  cause  a complaint  in  writing 
to  be  served  upon  the  packer,  stating  his  charges  in  that  respect,  and  requiring  the 
packer  to  attend  and  testify  at  a hearing  at  a time  and  pla^e  designated  therein,  at 
least  thirty  days  after  the  service  of  such  complaint;  and  at  such  time  and  place  there 
shall  be  afforded  the  packer  a reasonable  opportunity  to  be  informed  as  to  the  evi- 
dence introduced  against  him  (including  the  right  of  cross-examination) , and  to  be 
heard  in  person  or  by  counsel  and  through  witnesses,  under  such  regulations  as  the 
Secretary  may  prescribe.  Any  person  for  good  cause  shown  may  on  application  be 
allowed  by  the  Secretary  to  intervene  in  such  proceeding,  and  appear  in  person  or 
by  counsel.  At  any  time  prior  to  the  close  of  the  hearing  the  Secretary  may  amend 
the  complaint;  but  in  case  of  any  amendment  adding  new  charges  the  hearing  shall, 
on  the  request  of  the  packer,  be  adjourned  for  a period  not  exceeding  fifteen  dags* 

(b)  If,  after  such  hearing,  the  Secretary  finds  t,iat  the  packer  has  violated  or  is 
violating  any  provisions  of  this  title  covered  by  the  charges,  he  shall  make  a report  in 
writing  in  which  he  shall  state  his  findings  as  to  the  facts,  and  shall  issue  and  cause 
to  be  served  on  the  packer  an  order  requiring  such  packer  to  cease  and  desist  from 
continuing  such  violation.  The  testimony  taken  at  the  hearing  shall  be  reduced  to 
writing  and  filed  in  the  records  of  the  Department  of  Agriculture. 

(c)  Until  a transcript  of  the  record  in  such  hearing  has  been  filed  in  a circuit  court 
of  appeals  of  the  United  States,  as  provided  in  section  204,  the  Secretary  at  any  time 


MEAT  PACKEE. 


537 


upon  such  notice  and  in  such  manner  as  ne  deems  proper,  but  only  after  reasonable 
opportunity  to  the  packer  to  be  heard,  may  amend  or  set  aside  the  report  or  order,  in 
whole  or  in  part. 

(d)  Complaints,  orders,  and  other  processes  of  the  Secretary  under  this  section 
may  be  served  in  the  same  manner  as  provided  in  section  5 of  the  Act  entitled  “An 
Act  to  create  a Federal  Trade  Commission,  to  define  its  powers  and  duties,  and  for 
other  purposes,”  approved  September  26,  1914. 

Sec.  204.  (a)  An  order  made  under  section  203  shall  be  final  and  conclusive  unless 
within  thirty  days  after  service  the  packer  appeals  to  the  circuit  court  of  appeals 
for  the  circuit  in  which  he  has  his  principal  place  of  business,  by  filing  with  the  clerk 
of  such  court  a written  petition  praying  that  the  Secretary’s  order  be  set  aside  or 
modified  in  the  manner  stated  in  the  petition,  together  with  a bond  in  such  sum  as 
the  court  may  determine,  conditioned  that  such  packer  will  pay  the  costs  of  the  pro- 
ceedings if  the  court  so  directs. 

(b)  The  clerk  of  the  court  shall  immediately  cause  a copy  of  the  petition  to  be 
delivered  to  the  Secretary,  and  the  Secretary  shall  forthwith  prepare,  certify,  and 
file  in  the  court  a full  and  accurate  transcript  of  the  record  in  such  proceedings,  includ- 
ing the  complaint,  the  evidence,  and  the  report  and  order.  If  before  such  transcript 
is  filed  the  Secretary  amends  or  sets  aside  his  report  or  order,  in  whole  or  in  part,  the 
petitioner  may  amend  the  petition  within  such  time  as  the  court  may  determine, 
on  notice  to  the  Secretary. 

(c)  At  any  time  after  such  transcript  is  filed  the  court,  on  application  of  the  Secre- 
tary, may  issue  a temporary  injunction  restraining,  to  the  extent  it  deems  proper,  the 
packer  and  his  officers,  directors,  agents,  and  employees,  from  violating  any  of  the 
provisions  of  the  order  pending  the  final  determination  of  the  appeal. 

(d)  The  evidence  so  taken  or  admitted,  duly  certified  and  filed  as  aforesaid  as  a 
part  of  the  record,  shall  be  considered  by  the  court  as  the  evidence  in  the  case.  The 
proceedings  in  such  cases  in  the  circuit  court  of  appeals  shall  be  made  a preferred 
cause  and  shall  be  expedited  in  every  way. 

(e)  The  court  may  affirm,  modify,  or  set  aside  the  order  of  the  Secretary. 

(f)  If  the  court  determines  that  the  just  and  proper  disposition  of  the  case  requires 
the  taking  of  additional  evidence,  the  court  shall  order  the  hearing  to  be  reopened 
for  the  taking  of  such  evidence,  in  such  manner  and  upon  such  terms  and  conditions 
as  the  court  may  deem  proper.  The  Secretary  may  modify  his  findings  as  to  the  facts, 
or  make  new  findings,  by  reason  of  the  additional  evidence  so  taken,  and  he  shall 
file  such  modified  or  new  findings  and  his  recommendations,  if  any,  for  the  modifica- 
tion or  setting  aside  of  his  order,  with  the  return  of  such  additional  evidence. 

(g)  If  the  circuit  court  of  appeals  affirms  or  modifies  the  order  of  the  Secretary,  its 
decree  shall  operate  as  an  injunction  to  restrain  the  packer,  and  his  officers,  directors, 
agents,  and  employees  from  violating  the  provisions  of  such  order  or  such  order  as 
modified. 

(h)  The  circuit  court  of  appeals  shall  have  exclusive  jurisdiction  to  review,  and 
to  affirm,  set  aside,  or  modify,  such  orders  of  the  Secretary,  and  the  decree  of  such  court 
shall  be  final  except  that  it  shall  be  subject  to  review  by  the  Supreme  Court  of  the 
United  States  upon  certiorari,  as  provided  in  section  240  of  the  Judicial  Code,  if  such 
writ  is  duly  applied  for  within  sixty  days  after  entry  of  the  decree.  The  issue  of  such 
writ  shall  not  operate  as  a stay  of  the  decree  of  the  circuit  court  of  appeals,  in  so  far  as 
such  decree  operates  as  an  injunction,  unless  so  ordered  by  the  Supreme  Court. 

(i)  For  the  purposes  of  this  title  the  term  “circuit  court  of  appeals,”  in  case  the 
principal  place  of  business  of  the  packer  is  in  the  District  of  Columbia,  means  the 
Court  of  Appeals  of  the  District  of  Columbia. 

Sec.  205.  Any  packer,  or  any  officer,  director,  agent,  or  employee  of  a packer, 
who  fails  to  obey  any  order  of  the  Secretary  issued  under  the  provisions  of  section  203, 
or  such  order  as  modified — 

(1)  After  the  expiration  of  the  time  allowed  for  filing  a petition  in  the  circuit  court 
of  appeals  to  set  aside  or  modify  such  order,  if  no  such  petition  has  been  filed  within 
such  time;  or 

(2)  After  the  expiration  of  the  time  allowed  for  applying  for  a writ  of  certiorari,  if 
such  order,  or  such  order  as  modified,  has  been  sustained  by  the  circuit  court  of  appeals 
and  no  such  writ  has  been  applied  for  within  such  time;  or 

(3)  After  such  order,  or  such  order  gs  modified,  has  been  sustained  by  the  courts  as 

provided  in  section  204:  * 

Shall  on  conviction  be  fined  not  less  than  $500  nor  more  than  $10,000,  or  imprisoned 
for  not  less  than  six  months  nor  more  than  five  years,  or  both.  Each  day  during 
which  such  failure  continues  shall  be  deemed  a separate  offense. 


538 


MEAT  PACKER. 


Title  III. — Stockyards. 

Sec.  301.  When  used  in  this  act — 

(a)  The  term  “ stockyard  owner”  means  any  person  engaged  in  the  business  of 


yard  in  connection  with  the  receiving,  marketing,  feeding,  watering,  holding,  delivery, 
shipment,  weighing,  or  handling,  in  commerce,  of  live  stock; 

(c)  The  term  '‘market  agency”  means  any  person  engaged  in  the  business  of  (1) 
buying  or  selling  in  commerce  live  stock  at  a stockyard  on  a commission  basis  or  (2) 
furnishing  stockyard  services;  and 

(d)  The  term  “dealer”  means  any  person,  not  a market  agency,  engaged  in  the 
business  of  buying  or  selling  in  commerce  live  stock  at  a stockyard , either  on  his  own 
account  or  as  the  employee  or  agent  of  the  vendor  or  purchaser. 

Sec.  302.  (a)  When  used  in  this  title  the  term  “stockyard”  means  any  place, 
establishment,  or  facility  commonly  known  as  stockyards,  conducted  or  operated  for 
compensation  or  profit  as  a public  market,  consisting  of  pens,  or  other  inclosures,  and 
their  appurtenances,  in  which  live  cattle,  sheep,  swine,  horses,  mules,  or  goats  are 
received,  held,  or  kept  for  sale  or  shipment  in  commerce.  This  title  shall  not  apply 
to  a stockyard  of  which  the  area  normally  available  for  handling  live  stock,  exclusive 
of  runs,  aileys,  or  passage  ways,  is  less  than  20,000  square  feet. 

(b)  The  Secretary  shall  from  time  to  time  ascertain,  after  such  inquiry  as  he  deems 
necessary,  the  stockyards  which  come  within  the  foregoing  definition,  and  shall 
give  notice  thereof  to  the  stockyard  owners  concerned,  and  give  public  notice  thereof 
by  posting  copies  of  such  notice  in  the  stockyard,  and  in  such  other  manner  as  he  may 
determine.  After  the  giving  of  such  notice  to  the  stockyard  owner  and  to  the  public, 
the  stockyard  shall  remain  subject  to  the  provisions  of  this  title  until  like  notice  is 
given  by  the  Secretary  that  such  stockyard  no  longer  comes  within  the  foregoing 
definition. 

Sec.  303.  After  the  expiration  of  thirty  days  after  the  Secretary  has  given  public 
notice  that  any  stockyard  is  within  the  definition  of  section  302,  by  posting  copies  of 
such  notice  in  the  stockyard,  no  person  shall  carry  on  the  business  of  a market  agency 
or  dealer  at  such  stockyard  unless  he  has  registered  with  the  Secretary  under  such  rules 
and  regulations  as  the  Secretary  may  prescribe,  his  name  and  address,  the  character 
of  business  in  which  he  is  engaged  and  the  kinds  of  stockyards  services,  if  any,  which 
he  furnishes  at  such  stockyard.  Whoever  violates  the  provisions  of  this  section  shall 
be  liable  to  a penalty  of  not  more  than  $500  for  each  such  offense  and  not  more  than 
$25  for  each  day  it  continues,  which  shall  accrue  to  the  United  States  and  may  be 
recovered  in  a civil  action  brought  by  the  United  States. 

Sec.  304.  It  shall  be  the  duty  of  every  stockyard  owner  and  market  agency  to  furnish 
upon  reasonable  request,  without  discrimination,  reasonable  stockyard  services  at 
such  stockyard. 

Sec.  305.  All  rates  or  charges  made  for  any  stockyard  services  furnished  at  a stock- 
yard  by  a stockyard  owner  or  market  agency  shall  be  just,  reasonable,  and  non- 
discriminatory,  and  any  unjust,  unreasonable,  or  discriminatory  rate  or  charge  is 
prohibited  and  declared  to  be  unlawful. 

Sec.  306.  (a)  Within  sixty  days  after  the  Secretary  has  given  public  notice  that 
a stockyard  is  within  the  definition  of  section  302,  by  posting  copies  of  such  notice  in 
the  stockyard,  the  stockyard  owner  and  every  market  agency  at  such  stockyard  shall 
file  with  the  Secretary,  and  print  and  keep  open  to  public  inspection  at  the  stockyard, 
schedules  showing  all  rates  and  charges  for  the  stockyard  services  furnished  by  such 
person  at  such  stockyard.  If  a market  agency  commences  business  at  the  stockyard 
after  the  expiration  of  such  sixty  days  such  schedules  must  be  filed  before  any  stock- 
yard  services  are  furnished. 

(b)  Such  schedules  shall  plainly  state  all  such  rates  and  charges  in  such  detail  as 
the  Secretary  may  require,  and  shall  also  state  any  rules  or  regulations  which  in  any 
manner  change,  affect,  or  determine  any  part  or  the  aggregate  of  such  rates  or  charges, 
or  the  value  of  the  stockyard  services  furnished.  The  Secretary  may  determine  and 
prescribe  the  form  and  manner  in  which  such  schedules  shall  be  prepared,  arranged, 
and  posted,  and  may  from  time  to  time  make  such  changes  in  respect  thereto  as  may 
be  found  expedient. 

(c)  No  changes  shall  be  made  in  the  rates  or  charges  so  filed  and  published,  except 
after  ten  days’  notice  to  the  Secretary  and  to  the  public  filed  and  published  as  afore- 
said, which  shall  plainly  state  the  changes  proposed  to  be  made  and  the  time  such 
changes  will  go  into  effect;  but  the  Secretary  may,  for  good  cause  shown,  allow  changes 
on  less  than  ten  days’  notice,  or  modify  the  requirements  of  this  section  in  respect  to 
publishing,  posting,  and  filing  of  schedules,  either  in  particular  instances  or  by  a 
general  order  applicable  to  special  or  peculiar  circumstances  or  conditions. 


MEAT  PACKER. 


539 


(d)  The  Secretary  may  reject  and  refuse  to  file  any  schedule  tendered  for  filing 
which  does  not  provide  and  give  lawful  notice  of  its  effective  date,  and  any  schedule  so 
rejected  by  the  Secretary  shall  be  void  and  its  use  shall  be  unlawful. 

(e)  Whenever  there  is  filed  with  the  Secretary  any  schedule,  stating  a new  rate  or 
charge,  or  a new  regulation  or  practice  affecting  any  rate  or  charge,  the  Secretary  may 
either  upon  complaint  or  upon  his  own  initiative  without  complaint,  at  once,  and  if 
he  so  orders  without  answer  or  other  formal  pleading  by  the  person  filing  such  schedule, 
but  upon  reasonable  notice,  enter  upon  a hearing  concerning  the  lawfulness  of  such 
rate,  charge,  regulation,  or  practice,  and  pending  such  hearing  and  decision  thereon 
the  Secretary,  upon  filing  with  such  schedule  and  delivering  to  the  person  filing  it  a 
statement  in  writing  of  his  reasons  for  such  suspension,  may  suspend  the  operation  of 
such  schedule  and  defer  the  use  of  such  rate,  charge,  regulation,  or  practice,  but  not 
for  a longer  period  than  thirty  days  beyond  the  time  when  it  would  otherwise  go  into 
effect;  and  after  full  hearing,  whether  completed  before  or  after  the  rate,  charge,  regu- 
lation, or  practice  goes  into  effect,  the  Secretary  may  make  such  order  with  reference 
thereto  as  would  be  proper  in  a proceeding  initiated  after  it  had  become  effective.  If 
any  such  hearing  can  not  be  concluded  within  the  period  of  suspension  the  Secretary 
may  extend  the  time  of  suspension  for  a further  period  not  exceeding  thirty  days,  and 
if  the  proceeding  has  not  been  concluded  and  an  order  made  at  the  expiration  of  such 
thirty  days,  the  proposed  change  of  rate,  charge,  regulation,  or  practice  shall  go  into 
effect  at  the  end  of  such  period. 

(f)  After  the  expiration  of  the  sixty  days  referred  to  in  subdivision  (a)  no  person 
shall  carry  on  the  business  of  a stockyard  owner  or  market  agency  unless  the  rates 
and  charges  for  the  stockyard  services  furnished  at  the  stockyard  have  been  filed 
and  published  in  accordance  with  this  section  and  the  orders  of  the  Secretary  made 
thereunder;  nor  charge,  demand,  or  collect  a greater  or  less  or  different  compensation 
for  such  services  than  the  rates  and  charges  specified  in  the  schedules  filed  and  in 
effect  at  the  time;  nor  refund  or  remit  in  any  manner  any  portion  of  the  rates  or 
charges  so  specified  (but  this  shall  not  prohibit  a cooperative  association  of  producers 
from  bona  fide  returning  to  its  members,  on  a patronage  basis,  its  excess  earnings 
on  their  live  stock,  subject  to  such  regulations  as  the  Secretary  may  prescribe);  nor 
extend  to  any  person  at  such  stockyard  any  stockyard  services  except  such  as  are 
specified  in  such  schedules. 

(g)  Whoever  fails  to  comply  with  the  provisions  of  this  section  or  of  any  regulation 
or  order  of  the  Secretary  made  thereunder  shall  be  liable  to  a penalty  of  not  more 
than  $500  for  each  such  offense,  and  not  more  than  $25  for  each  day  it  continues, 
which  shall  accrue  to  the  United  States  and  may  be  recovered  in  a civil  action  brought 
by  the  United  States. 

(h  Whoever  willfully  fails  to  comply  with  the  provisions  of  this  section  or  of  any 
regulation  or  order  of  the  Secretary  made  thereunder  shall  on  conviction  be  fined  not 
more  than  , 1.000,  or  imprisoned  not  more  than  one  year,  or  both. 

Sec.  307.  It  shall  be  the  duty  of  every  stockyard  owner  and  market  agency  to  es- 
tablish, observe,  and  enforce  just,  reasonable,  and  nondiscriminatorv  regulations  and 
practices  in  respect  to  the  furnishing  of  stockyard  services,  and  every  unjust,  unrea- 
sonable, or  discriminatory  regulation  or  practice  is  prohibited  and  declared  to  be 
unlawful. 

Sec.  308.  (a)  If  any  stockyard  owner,  market  agency,  or  dealer,  violates  any  of 
the  provisions  of  section  304,  305,  306,  or  307,  or  of  any  order  of  the  Secretary  made 
under  this  title,  he  shall  be  liable  to  the  person  or  persons  injured  thereby  for  the  full 
amount  of  damages  sustained  in  consequence  of  such  violation. 

(b)  Such  liability  may  be  enforced  either  (1)  by  complaint  to  the  Secretary  as  pro- 
vided in  section  309,  or  (21  by  suit  in  any  district  court  of  the  United  States  of  com- 
petent jurisdiction;  but  this  section  shall  not  in  any  way  abridge  or  alter  the  remedies 
now  existing  at  common  law  or  by  statute,  but  the  provisions  of  this  Act  are  in  addi- 
tion to  such  remedies. 

Sec.  309.  (a)  Any  person  complaining  of  anything  done  or  omitted  to  be  done  by 
any  stockyard  owner,  market  agency,  or  dealer  (hereinafter  in  this  section  referred  to 
as  the  “ defendant”)  in  violation  of  the  provisions  of  sections  304,  305,  306,  or  307, 
or  of  an  order  of  the  Secretary  made  under  this  title,  may,  at  any  time  within  one  year 
after  the  cause  of  action  accrues,  apply  to  the  Secretary  by  petition  which  shall  briefly 
state  the  facts,  whereupon  the  complaint  thus  made  shall  be  forwarded  by  the  Secre- 
tary to  the  defendant,  who  shall  be  called  upon  to  satisfy  the  complaint,  or  to  answer 
it  in  miting,  within  a reasonable  time  to  be  specified  by  the  Secretary.  If  the  defend- 
ant within  the  time  specified  makes  reparation  for  the  injury  alleged  to  be  done  he 
shall  be  relieved  of  liability  to  the  complainant  only  for  the  particular  violation  thus 
complained  of.  If  the  defendant  does  not  satisfy  the  complaint  within  the  time  speci- 
fied, or  there  appears  to  be  any  reasonable  ground  for  investigating  the  complaint, 


540 


MEAT  PACKER. 


it  shall  be  the  duty  of  the  Secretary  to  investigate  the  matters  complained  of  in  such 
manner  and  by  such  means  as  he  deems  proper. 

(b)  The  Secretary,  at  the  request  of  the  live-stock  commissioner,  Board  of  Agri- 
culture, or  other  agency  of  a State  or  Territory,  having  jurisdiction  over  stockyards  in 
such  State  or  Territory,  shall  investigate  any  complaint  forwarded  by  such  agency  in 
like  manner  and  with  the  same  authority  and  powers  as  in  the  case  of  a complaint 
made  under  subdivision  (a). 

(c)  The  Secretary  may  at  any  time  institute  an  inquiry  on  his  own  motion,  in  any 
case  and  as  to  any  matter  or  thing  concerning  which  a complaint  is  authorized  to  be 
made  to  or  before  the  Secretary,  by  any  provision  of  this  title,  or  concerning  which 
any  question  may  arise  under  any  of  the  provisions  of  this  title,  or  relating  to  the 
enforcement  of  any  of  the  provisions  of  this  title.  The  Secretary  shall  have  the  same 
power  and  authority  to  proceed  with  any  inquiry  instituted  upon  his  own  motion  as 
though  he  had  been  appealed  to  by  petition,  including  the  power  to  make  and  enforce 
any  order  or  orders  in  the  case  or  relating  to  the  matter  or  thing  concerning  which  the 
inquiry  is  had,  except  orders  for  the  payment  of  money. 

(d)  No  complaint  shall  at  any  time  be  dismissed  because  of  the  absence  of  direct 
damage  to  the  complainant. 

(e)  If  after  hearing  on  a complaint  the  Secretary  determines  that  the  complainant 
is  entitled  to  an  award  of  damages,  the  Secretary  shall  make  an  order  directing  the 
defendant  to  pay  to  the  complainant  the  sum  to  which  he  is  entitled  on  or  before  a 
day  named. 

(f)  If  the  defendant  does  not  comply  with  an  order  for  the  payment  of  money  within 
the  time  limit  in  such  order,  the  complainant,  or  any  person  for  whose  benefit  such 
order  was  made,  may  within  one  year  of  the  date  of  the  order  file  in  the  district  court 
of  the  United  States  for  the  district  in  which  he  resides  or  in  which  is  located  the 
principal  place  of  business  of  the  defendant  or  in  any  State  court  having  general 
jurisdiction  of  the  parties,  a petition  setting  forth  briefly  the  causes  for  which  he 
claims  damages  and  the  order  of  the  Secretary  in  the  premises.  Such  suit  in  the 
district  court  shall  proceed  in  all  respect  like  other  civil  suits  for  damages  except  that 
the  findings  and  orders  of  the  Secretary  shall  be  priina  facie  evidence  of  the  facts 
therein  stated,  and  the  petitioner  shall  not  be  liable  for  costs  in  the  district  court  nor 
for  costs  at  any  subsequent  stage  of  the  proceedings  unless  they  accrue  upon  his 
appeal,  if  the  petitioner  finally  prevails,  he  shall  be  allowed  a reasonable  attorney’s 
fee  to  be  taxed  and  collected  as  a part  of  the  costs  of  the  suit. 

Sec.  310.  Whenever  after  full  hearing  upon  a complaint  made  as  provided  in  section 
309,  or  after  full  hearing  under  an  order  for  investigation  and  hearing  made  by  the 
Secretary  on  his  own  initiative,  either  in  extension  of  any  pending  complaint  or 
without  any  complaint  whatever,  the  Secretary  is  of  the  opinion  that  any  rate,  charge, 
regulation,  or  practice  of  a stockyard  owner  or  market  agency,  for  or  in  connection 
with  the  furnishing  of  stockyard  services,  is  or  will  be  unjust,  unreasonable,  or  dis- 
criminatory, the  Secretary — 

(a)  May  determine  and  prescribe  what  will  be  the  just  and  reasonable  rate  or  charge, 
or  rates  or  charges,  to  be  thereafter  observed  in  such  case,  or  the  maximum  or  mini- 
mum, or  maximum  and  minimum,  to  be  charged,  and  what  regulation  or  practice  is 
or  will  be  just,  reasonable,  and  nondiscriminatory  to  be  thereafter  followed;  and 

(b)  Ma}^  make  an  order  that  such  owner  or  operator  (1)  shall  cease  and  desist  from 
such  violation  to  the  extent  to  which  the  Secretary  finds  that  it  does  or  will  exist; 
(2)  shall  not  thereafter  publish,  demand,  or  collect  any  rate  or  charge  for  the  furnish- 
ing of  stockyard  services  other  than  the  rate  or  charge  so  prescribed,  or  in  excess  of 
the  maximum  or  less  than  the  minimum  so  prescribed,  as  the  case  may  be;  and  (3) 
shall  conform  to  and  observe  the  regulation  or  pactice  so  prescribed. 

Sec.  311.  Whenever  in  any  investigation  under  the  provisions  of  this  title,  or  in 
any  investigation  instituted  by  petition  of  the  stockyard  owner  or  market  agency 
concerned,  which  petition  is  hereby  authorized  to  be  filed,  the  Secretary  after  full 
hearing  finds  that  any  rate,  charge,  regulation,  or  practice  of  any  stockyard  owner  or 
market  agency,  for  or  in  connection  with  the  receiving,  marketing,  feeding,  holding, 
delivery,  shipment,  weighing,  or  handling,  not  in  commerce,  of  live  stock,  causes 
any  undue  or  unreasonable  advantage,  prejudice,  or  preference  as  between  persons  or 
localities  in  intrastate  commerce  in  live  stock  on  the  one  hand  and  interstate  or 
foreign  commerce  in  live  stock  on  the  other  hand,  or  any  undue,  unjust,  or  unreason- 
able discrimination  against  interstate  or  foreign  commerce  in  live  stock,  which  is 
hereby  forbidden  and  declared  to  be  unlawful,  the  Secretary  shall  prescribe  the  rate, 
charge,  regulation,  or  practice  thereafter  to  be  observed,  in  such  manner  as,  in  his 
judgment,  will  remove  such  advantage,  preference,  or  discrimination.  Such  rates, 
charges,  regulations,  or  practices  shall  be  observed  while  in  effect  by  the  stockyard 
owners  or  market  agencies  parties  to  such  proceeding  affected  thereby,  the  law  of  any 
State  or  the  decision  or  order  of  any  State  authority  to  the  contrary  notwithstanding. 


MEAT  PACKER. 


541 


Sec.  312.  (a)  It  shall  be  unlawful  for  any  stockyard  owner,  market  agency,  or 
dealer  to  engage  in  or  use  any  unfair  unjustly  discriminatory,  or  deceptive  practice 
or  device  in  connection  with  the  receiving,  marketing,  feeding,  watering,  holding, 
delivery  shipment,  weighing  or  handling,  in  commerce  at  a stockyard,  of  live  stock. 

(b)  Whenever  complaint  is  made  to  the  Secretary  by  any  person,  or  whenever  the 
Secretary  has  reason  to  believe,  that  any  stockyard  owner,  market  agency,  or  dealer 
is  violating  the  provisions  of  subdivision  (a),  the  Secretary  after  notice  and  full  hear- 
ing may  make  an  order  that  he  shall  cease  and  desist  from  continuing  such  violation 
to  the  extent  that  the  Secretary  finds  that  it  does  or  will  exist. 

Sec.  313.  Except  as  otherwise  provided  in  this  Act,  all  orders  of  the  Secretary  under 
this  title,  other  than  orders  for  the  payment  of  money,  shall  take  effect  within  such 
reasonable  time,  not  less  than  five  days,  as  is  prescribed  in  the  order,  and  shall  con- 
tinue in  force  until  his  further  order,  or  for  a specified  period  of  time,  according  as  is 
prescribed  in  the  order,  unless  such  order  is  suspended  or  modified  or  set  aside  by  the 
Secretary  or  is  suspended  or  set  aside  by  a court  of  competent  jurisdiction. 

Sec.  314.  (a)  Any  stockyard  owner,  market  agency,  or  dealer  who  knowingly  fails 
to  obey  any  order  made  under  the  provisions  of  section  310,  311,  or  312  shall  forfeit  to 
the  United  States  the  sum  of  $500  for  each  offense.  Each  distinct  violation  shall  be  a 
separate  offense,  and  in  case  of  a continuing  violation  each  day  shall  be  deemed  a 
separate  offense.  Such  forfeiture  shall  be  recoverable  in  a civil  suit  in  the  name  of  the 
United  States. 

(b)  It  shall  be  the  duty  of  the  various  district  attorneys,  under  the  direction  of  the 
Attorney  General,  to  prosecute  for  the  recovery  of  forfeitures.  The  costs  and  expense 
of  such  prosecution  shall  be  paid  out  of  the  appropriation  for  the  expenses  of  the  courts 
of  the  United  States. 

Sec.  315.  If  any  stockyard  owner,  market  agency,  or  dealer  fails  to  obey  any  order 
of  the  Secretary  other  than  for  the  payment  of  money  while  the  same  is  in  effect,  the 
Secretary,  or  any  party  injured  thereby,  or  the  United  States  by  its  Attorney  General, 
may  apply  to  the  district  court  for  the  district  in  which  such  person  has  his  principal 
place  of  business  for  the  enforcement  of  such  order.  If  after  hearing  the  court  deter- 
mines that  the  order  was  lawfully  made  and  duly  served  and  that  such  person  is  in 
disobedience  of  the  same,  the  court  shall  enforce  obedience  to  such  order  by  a writ  of 
injunction  or  other  proper  process,  mandatory  or  otherwise,  to  restrain  such  person, 
his  officers,  agents,  or  representatives  from  further  disobedience  of  such  order  or  to 
enjoin  upon  him  or  them  obedience  to  the  same. 

Sec.  316.  For  the  purposes  of  this  title,  the  provisions  of  all  laws  relating  to  the 
suspending  or  restraining  the  enforcement,  operation,  or  execution  of,  or  the  setting 
aside  in  whole  or  in  part  the  orders  of  the  Interstate  Commerce  Commission,  are  made 
applicable  to  the  jurisdiction,  powers,  and  duties  of  the  Secretary  in  enforcing  the 
provisions  of  this  title,  and  to  any  person  subject  to  the  provisions  of  this  title. 

Title  IV. — General  Provisions. 

Sec.  401.  Every  packer,  stockyard  owner,  market  agency,  and  dealer  shall  keep 
such  accounts,  records,  and  memoranda  as  fully  and  correctly  disclose  all  transactions 
involved  in  his  business,  including  the  true  ownership  of  such  business  by  stockholding 
or  otherwise.  Whenever  the  Secretary  finds  that  the  accounts,  records,  and  memoranda 
of  any  such  person  do  not  fully  and  correctly  disclose  all  transactions  involved  in  his 
business,  the  Secretary  may  prescribe  the  manner  and  form  in  which  such  accounts, 
records,  and  memoranda  shall  be  kept,  and  thereafter  any  such  person  who  fails  to 
keep  such  accounts,  records,  and  memoranda  in  the  manner  and  form  prescribed  or 
approved  by  the  Secretary  shall  upon  conviction  be  fined  not  more  than  $5,000,  or 
imprisoned  not  more  than  three  years  or  both. 

Sec.  402.  For  the  purpose  of  securing  effective  enforcement  of  the  provisions  of 
this  Act,  the  provisions  (including  penalties)  of  sections  6,  8,  9,  and  10  of  the  Act 
entitled  “An  Act  to  create  a Federal  Trade  Commission,  to  define  its  powers  and  duties, 
and  for  other  purposes,”  approved  September  26,  1914,  are  made  applicable  to  the 
jurisdiction,  powers,  and  duties  of  the  Secretary  in  enforcing  the  provisions  of  this 
Act  and  to  any  person  subject  to  the  provisions  of  this  Act,  whether  or  not  a cor- 
poration. The  Secretary,  in  person  or  by  such  agents  as  he  may  designate,  may 
prosecute  any  inquiry  necssary  to  his  duties  under  this  Act  in  any  part  of  the 
United  States. 

Sec.  403.  When  construing  and  enforcing  the  provisions  of  this  Act,  the  act,  omis- 
sion, or  failure  of  any  agent,  officer,  or  other  person  acting  for  or  employed  by  any 
packer,  stockyard  owner,  market  agency,  or  dealer,  within  the  scope  of  his  employ- 
ment or  office,  shall  in  every  case  also  be  deemed  the  act,  omission,  or  failure  of  such 
packer,  stockyard  owner,  market  agency,  or  dealer,  as  well  as  that  of  such  agent, 
officer,  or  other  person. 


542 


MEAT  PACKER. 


Sec.  404.  The  Secretary  may  report  any  violation  of  this  Act  to  the  Attorney 
General  of  the  United  States,  who  shall  cause  appropriate  proceedings  to  be  com- 
menced and  prosecuted  in  the  proper  courts  of  the  United  States  without  delay. 

Sec.  405.  Nothing  contained  in  this  Act,  except  as  otherwise  provided  herein,  shall 
be  construed — 

(a)  To  prevent  or  interfere  with  the  enforcement  of,  or  the  procedure  under,  the 
provisions  of  the  Act  entitled  “An  Act  to  protect  trade  and  commerce  against  unlawful 
restraints  and  monopolies,”  approved  July  2,  1890,  the  Act  entitled  “An  Act  to  sup- 
plement existing  laws  against  unlawful  restraints  and  monopolies,  and  for  other 
purposes,”  approved  October  15,  1914,  the  Interstate  Commerce  Act  as  amended, 
the  Act  entitled  ‘ ‘An  Act  to  promote  export  trade,  and  for  other  purposes,”  approved 
April  10,  1918,  or  sections  73  to  77,  inclusive,  of  the  Act  of  August  27,  1894,  entitled 
“ An  Act  to  reduce  taxation,  to  provide  revenue  for  the  Government,  and  for  other 
purposes,”  as  amended  by  the  Act  entitled  “An  Act  to  amend  sections  seventy- 
three  and  seventy-six  of  the  Act  of  August  twenty-seventh,  eighteen  hundred  and 
ninety-four,  entitled  “An  Act  to  reduce  taxation,  to  provide  revenue  for  the  Govern- 
ment, and  for  other  purposes,”  approved  February  12,  1913,  or 

(b)  To  alter,  modify,  or  repeal  such  Acts  or  any  part  or  parts  thereof,  or 

(c)  To  prevent  or  interfere  with  any  investigation,  proceeding,  or  prosecution 
begun  and  pending  at  the  time  this  Act  becomes  effective. 

Sec.  406.  (a)  Nothing  in  this  Act  shall  affect  the  power  or  jurisdiction  of  the  Inter- 
state Commerce  Commission,  nor  confer  upon  the  Secretary  concurrent  power  or 
jurisdiction  over  any  matter  within  the  power  or  jurisdiction  of  such  Commission. 

(b)  On  and  after  the  enactment  of  this  Act,  and  so  long  as  it  remains  in  effect 
the  Federal  Trade  Commission  shall  have  no  power  or  jurisdiction  so  far  as  relating  to 
any  matter  wnich  by  tuis  Act  is  made  subject  to  tue  jurisdiction  of  the  Secretary, 
except  in  cases  in  which,  before  the  enactment  of  this  Act,  complaint  has  been  served 
under  section  5 of  the  Act  entitled  ‘ ‘An  Act  to  create  a Federal  Trade  Commission,  to 
define  its  power  and  duties,  and  for  other  purposes,”  approved  September  26,  1914. 
or  under  section  11  of  the  Act  entitled  “An  Act  to  supplement  existing  laws  against 
unlawful  restraints  and  monopolies,  and  for  otner  purposes,”  approved  October  15, 
1914. 

Sec.  407.  The  Secretary  may  cooperate  with  any  department  or  agency  of  the 
Government,  any  State,  Territory,  District,  or  possession,  or  department,  agency  or 
political  subdivision  thereof,  or  any  person;  and  shall  have  the  power  to  appoint, 
remove,  and  fix  the  compensation  of  such  officers  and  employees,  not  in  conflict  with 
existing  law,  and  make  such  expenditures  for  rent  outside  the  District  of  Columbia, 
printing,  telegrams,  telephones,  law  books,  books  of  reference,  periodicals,  furniture, 
stationery,  office  equipment,  travel,  and  other  supplies  and  expenses  as  shall  be 
necessary  to  the  administration  of  this  Act  in  the  District  of  Columbia  and  elsewhere, 
and  as  may  be  appropriated  for  by  Congress,  and  there  is  hereby  authorized  to  be 
appropriated,  out  of  any  money  in  the  Treasury  not  otherwise  appropriated,  such 
sums  as  may  be  necessary  for  such  purpose. 

Sec.  408.  If  any  provision  of  this  Act  or  the  application  thereof  to  any  person  or 
circumstances  is  held  invalid,  the  validity  of  the  remainder  of  the  Act  and  of  the 
application  of  such  provision  to  other  persons  and  circumstances  shall  not  be  affected 
thereby. 


X 


Pressboard 

Pamphlet 

Binder 

Gaylord  Bros.,  Inc. 

Makers 

Syracuse,  N.  Y. 

PAT.  JAN  21,  1908 


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